Around Rs 6,800 crore of debt will be refinanced with a maturity of around 20 years and lower interest rate
Reliance Defence and Engineering Ltd (RDEL) has received approval from a consortium of lenders to exit its Corporate Debt Restructuring (CDR) package, making it eligible to bid for Indian Navy's contracts.
Sources close to the development said, "The consortium of lenders led by IDBI Bank has given its approval to the CDR exit plan of RDEL (subsidiary of Reliance Infrastructure). The lenders have also given their go-ahead for the implementation of refinancing scheme of RDEL."
On March 29, both these proposals were presented to the CDR Empowered Group's meeting wherein it was approved by the majority of the lenders. As per the nod, around Rs 6,800 crore of debt will be refinanced with a maturity of around 20 years and lower interest rate.
The Reserve Bank of India had also given it nod for RDEL to exit the CDR package.
When approached for a response, RDEL and Reliance Infrastructure refused to comment on the subject.
A communication has been sent by the lead lender to the Ministry of Defence briefing them about the CDR exit development.
"With the Indian government having cleared it earlier that two private shipyards being allowed to bid for government contracts, this paves the way for RDEL to start bagging orders for the Indian Navy. It already has a work order for the Indian Coast Guard," said a source.
RDEL will now be able to build submarines, landing platform docks and corvettes.
The other company to be eligible for Indian Navy orders is Larsen & Toubro. Both these private companies are likely to give a tough fight to the government-owned shipyards of India.
RDEL's current order stands at over Rs 5,300 crore. After having acquired Pipavav Defence and Offshore Engineering Company, Reliance Infrastructure had renamed it as RDEL. Soon after the acquisition, the plan to exit CDR was made public.
AVENUES OPEN
- Exit will make RDEL eligible to bid for Indian Navy’s contracts
- RDEL will now be able to build submarines, docks, others
- Refinancing will entail 20 years maturity and lower interest rates
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The Reserve Bank of India had also given it nod for RDEL to exit the CDR package.
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