Reliance group run by Anil Ambani has reached an in-principle agreement with more than 90 percent of its lenders. According to the reports, the lenders of the Reliance group have confirmed that they will not sell off the pledged shares until September 30, 2019. They also mentioned that the leaders of the group have nominated the investment bankers to sell around 30 percent of their stake to institutional investors of Reliance Power; the statement was given by officials at the Reliance group and lenders.
Reliance Communications Ltd’s, shares fell to 0.72 percent by Rs 0.04 at Rs 5.50 as compared to its previous closing at Rs 5.54 on BSE listing. The current market cap of Reliance Group is of Rs 1,521.04 crore.
The agreement says that due to the most recent drop in the share prices of the companies the lenders will not sell off any of the promoters’ pledged shares nor force their security holdings until September 30, 2019, because of lower collateral cover or decrease in margin.
Altogether there are around nine lenders at the promoter level, and the total mutual fund borrower amount is around Rs 1,000 crore in comparison to other groups the borrower’s numbers, and the borrower amount is much larger.
Ahead of the unusual fall in the share prices, the value of the promoter shareholding was more than Rs 2,500 crore in Reliance Power; this value might have cleared 65 percent of total promoter borrowing amount.
Meanwhile, few mutual fund lenders have mentioned that their loan amounts have been paid sufficiently earlier by Reliance Group and we are collaborating with the group for the next course of action.
As per the agreement, the principal and interest amounts will be paid by Reliance group to the lenders in accordance with dates specified in the loan agreement. Meanwhile, the investment bankers will soon begin the roadshows basically for a share placement.
The Reliance group consists of some of the key lenders such as DHFL Pramerica MF, Yes Bank, Templeton MF, IndusInd Bank, and Indiabulls MF.
Borrowers amount of Indiabulls MF and DHFL Pramerica MF together adding to not more than Rs 100 crore will be paid completely by March 31, 2019, Key officials informed.
The Reliance Group spokesperson informed that we are very much thankful to our creditors, for keeping their faith in the core values of the companies and also for accepting the plan of the in-principle agreement.
While the Reliance officials mentioned that they have managed to reach 90 percent plus of its lenders during the promoter group level.
The Reliance Infrastructure Limited maintains 40 percent of an equity stake in Reliance Power, and after the share placement process is completed by the promoters, Reliance Group will still hold the majority of stake and control, the banker stated.
During this month, when the company’s share fell, both L&T and Edelweiss went against the pledge and sold out their shares in the open market. This further let to ripple effect with some listing companies making them lose half of their share values. A case has been filed against both in the high court for illegal selling of shares by Reliance group and Reliance Power has complained to SEBI, the capital market regulator against it. Despite this, Edelweiss and L&T Finance both have strongly denied the charges.
At present, the Reliance Group’s loan to L&T Finance is Zero, while the group’s loan exposure to Edelweiss is Rs 150 crore.
The next hearing against the case is held on Monday, and there was not interim relief granted by the Court to the Reliance group.