Anil Ambani promoted Reliance Infrastructure (RInfra) on Thursday announced that all its 16 lenders have signed 'inter-creditor agreement' in order to resolve the debt-laden company's borrowings.
As per available figures, RInfra has a debt of around Rs 7,500 crore. Over a year ago, the company was sitting on a debt pile of about Rs 22,000 crore.
"Reliance Infrastructure's 16 lenders have signed the inter-creditor agreement (ICA). As per the Reserve Bank of India's circular of June 7, 2019, 100% of its lenders have signed ICA for the resolution of Reliance Infrastructure's debt," the company spokesperson said in a statement.
With this, RInfra has now achieved a standstill for 180 days. According to the RBI circular, the resolution plan on RInfra's debt is to be implemented within a time span of 180 days.
According to the circular by the RBI, 75% of the lenders by value and 60% by the number are required to sign the ICA for a resolution plan. However, in RInfra's case, 100% of them have signed the ICA for resolution of the debt.
The new circular specifies that if a borrower defaults to any of the lenders, others will have to review the account within 30 days from the default, which is called the review period. During this period, banks may decide on a resolution plan. All the lenders have to enter into an ICA within the 30 days in order to finalise and implement the resolution plan.
This latest move is part of the Ambani promoted company's attempt to lower its debt level and eventually become a debt-free company by 2020.
In a regulatory filing, the company said it is confident of implementing its resolution plan well before the 180-day deadline, based on advanced progress of its various asset monentisation initiatives.
The company has monetised its various assets, including Delhi-Agra Toll Road to Mumbai's power distribution business to Adani Transmission.
In March, the company had signed a definite binding agreement with Singapore-based Cube Highways and Infrastructure III Pte Ltd for Delhi-Agra Toll Road for an enterprise value of Rs 3,600 crore. With this single transaction, the company's debt is likely to get reduced to just over Rs 4,000 crore.
In August 2018, Adani Transmission acquired RInfra's Mumbai power generation, transmission and distribution business. Post the deal, which involved a transaction value of Rs 18,800 crore, RInfra had managed to reduce its debt by Rs 13,800 crore. Prior to the transaction, it had a debt of Rs around Rs 22,000 crore.
In a recent development, RInfra plans to monetise its marquee seven lakh square feet Reliance Center in Santacruz, Mumbai, through a long-term lease.
In 2017, the company was planning to launch an Infrastructure Investment Trust (InvIT) by transferring its operational road assets. However, due to unfavourable market conditions and low investor sentiment, RInfra shelved this plan too. Its initial plan was to raise Rs 5,000 crore through this option, which was eventually trimmed down to Rs 3,000 crore. After being unable to launch the InvIT, the company's plans to pare debt were affected.
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With this, RInfra has now achieved a standstill for 180 days. According to the RBI circular, the resolution plan on RInfra's debt is to be implemented within a time span of 180 days.
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