Reliance Infra plans to raise $913 million

Reliance Infra plans to raise $913 million
Comment E-mail Print Share
First Published: Sun, May 24 2009. 10 33 AM IST
Updated: Mon, May 25 2009. 09 39 AM IST
Mumbai: India’s Reliance Infrastructure Ltd said it planned to raise Rs43 billion ($913 million) by issuing share warrants to its founders, as it gears up to bid for infrastructure contracts.
Reliance Infrastructure said on Sunday it would issue 42.9 million warrants convertible into shares at Rs1,000 each, a 10.8% discount to Friday’s closing price, to founders’ Anil Dhirubhai Ambani group.
The founders’ stake will rise to 48% from 38%.
“We have a great sense of excitement at the unprecedented opportunities unfolding before Reliance Infrastructure, in high growth areas of power and infrastructure development,” chairman Anil Ambani said in a statement.
The issue would raise the net worth and borrowing limit of the firm by a third, it said, boosting its ability to qualify for large road, power, rail and port projects.
India needs $500 billion over five years to overhaul its crumbling infrastructure.
Reliance Infrastructure, which is building roads, metro rail and power plants worth Rs128 billion will also look at ports, airports and real estate development, it said.
The company said other long-term shareholders such as state-run Life Insurance Corp and insurance firms that together own a fifth of the firm can participate in the offering on the same terms. It did not elaborate.
The company also said it had cancelled 43 million warrants issued to the founders in January 2008 and convertible into shares at Rs1,822.08 a share before 19 July.
The upfront payment of Rs7.83 billion on the warrants will accrue to the firm’s reserves, it said.
Founders of several Indian firms have stayed away from converting warrants after share prices fell sharply.
Reliance Infra shares lost nearly three quarters of their value last year but have almost doubled so far in 2009.
Comment E-mail Print Share
First Published: Sun, May 24 2009. 10 33 AM IST