Anil Ambani led Reliance Group has reached an in-principle standstill understanding with more than 90% of the lenders at the promoter group level, after L&T Finance and Edelweiss Group had dumped Anil Ambani Group shares causing the unprecedented fall in share prices of Reliance Power and other group shares early this month.
As per the understanding, these 90% lenders will not enforce security and will not sell any of the promoters’ pledged shares till September 30, 2019 on account of lower collateral cover or reduced margin due to the recent unprecedented fall in share prices, a source in the know of the development told The Hindu.
Reliance Group will pay the principal and interest to the lenders as per the scheduled due dates specified in the loan agreements.
The Group has also informed the lenders that it has appointed investment bankers to place a part of promoters direct 30% shareholding in Reliance Power Ltd. to target institutional investors and road shows by the investment bankers is likely to commence next week.
Value of the promoter stake in Reliance Power, before the unprecedented fall in share prices, was more than ₹2500 crores, and would clear more than 65% of total promoter borrowings.
Reliance Infrastructure Ltd. holds 40% equity in Reliance Power – and even after placement of its holding by the Promoters, majority stake and control remains with the Reliance Group.
Reliance Group has nine lenders at the promoters level and mutual fund exposure at Reliance Group stands at ₹1000 crore. Some of key lenders are – Templeton MF, DHFL Primeamerica MF, Indiabulls MF, IndusInd Bank, Yes Bank.
Franklin Templeton with 90% of the MF exposure has supported the Reliance Group promoters while Primeamerica MF and Indiabulls MF has combined exposure less than ₹100 crore are expected to be off in full before 31st March 2019.
L&T Finance don’t have any exposure in Reliance Group while Edelweiss Group still has exposure ₹150 crores.
When asked for comments, Reliance Group spokesperson said, “We are grateful to our lenders for believing in the intrinsic and fundamental value of our companies, and granting their in principle approval to standstill arrangements.”
Reliance Capital shares closed up marginally at ₹148.55 on Friday, valuing the company at ₹3754 crore. Reliance Infrastructure shares closed down 2% at ₹114.9, valuing the company at ₹3022 crore. Shares of Reliance Power closed down 3.8% at ₹10.2, valuing the company at ₹2861 crore. Reliance Communications shares closed down marginally at ₹5.5, valuing the company at ₹1521 crore.
Reliance Naval and Engineering shares closed up 2.4% at ₹8.55, valuing the company at ₹631 crore. Reliance Home Finance shares closed down 2.5% at ₹23.85, valuing the company at ₹1156 crore.
Reliance Nippon Life Asset Management shares closed down 5% at ₹151.25, valuing the company at ₹9257 crore.
The total market capitalisation of all listed Reliance Group companies put together stands at ₹21,300 crore, less than half of the debts of Reliance Communications alone.