Reliance Defence and Engineering to exit corporate debt restructuring scheme1 min read . Updated: 03 May 2017, 03:02 AM IST
Reliance Defence and Engineering, a subsidiary of Reliance Infrastructure , has got approval from corporate debt restructuring empowered group to exit the scheme
Mumbai: Anil Ambani-led Reliance Infrastructure Ltd (RInfra) on Tuesday said its unit Reliance Defence and Engineering Ltd (RDEL) has received approval from the corporate debt restructuring empowered group (CDR EG) for exiting from the scheme.
RDEL’s existing debt of Rs650 crore will be converted into equity shares at a price of Rs59.35 apiece, RInfra said in a note on Tuesday. It has increased its shareholding in RDEL to 31%, Reliance Infrastructure said.
“As part of the refinancing scheme approved by the lenders, the door-to-door tenure of RDEL’s term loans stands extended to 18 years," the statement said.
A consortium of lenders, led by IDBI Bank Ltd, on 20 April gave its nod to RDEL’s CDR exit plan with a longer maturity period for loans worth about Rs6,800 crore. It also gave its go-ahead for the implementation of its refinancing scheme.
RDEL has a large ship-building infrastructure while RInfra has businesses in power, roads, and Metro rail sectors. RDEL’s current order stands at over Rs5,300 crore for naval, coast guard and commercial vessels.
“Shareholders of RDEL by an overwhelming majority of 100% had already approved the said issue of equity shares to lenders by conversion of debt, at the extraordinary general meeting held on March 20, 2017," the statement said.
In 2015, RInfra acquired Pipavav Defence and Offshore Engineering Co., which was renamed RDEL. RInfra expects improved financial flexibility and increased business opportunities for the shipyard following the CDR exit, and is likely to compete with Larsen and Toubro Ltd (L&T) for contracts for making submarines, landing platform docks and corvettes.
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