Reliance Power’s board of directors has approved plans to raise Rs 4,198 crore through foreign currency convertible bonds (FCCB), which will be issued to affiliates of Värde Investment Partners, a Singapore-based global alternative investment firm, according to a statement. company press release.
The bonds, fixed at an ultra-low interest rate of 5 per cent per annum, will mature in 10 years and will be convertible into shares at Rs 51 per share. The proceeds are expected to help the company reduce debt and drive future growth, particularly in its renewable energy projects.
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The announcement follows Reliance Power’s recent progress towards becoming debt-free, with its subsidiary Rosa Power paying Rs 850 crore upfront to Värde Partners in September. The move comes as the company seeks to shore up its finances amid increased competition and demand in the electricity sector.
Apart from the bond issue, the board of the energy company also approved an Employee Stock Option Scheme (ESOS) for all employees of the company and its subsidiaries, granting up to 22 crore shares. ESOS aims to align employee compensation with company performance, according to the press release.
The FCCBs and ESOS are subject to regulatory and shareholder approvals, and the company aims for rapid execution in a competitive power generation market.
Shares of Reliance Power closed at Rs 53.65 per share, up 4.99 per cent, while the benchmark Sensex fell 2.10 per cent to 82,497.10 points.
First published: October 3, 2024 | 22:05 IS
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