Reliance Power has made a Rs 1,200 crore one-time settlement (OTS) proposal to the lenders of its subsidiary Vidarbha Industries Power Ltd (VIPL) to settle its debt, sources aware of the matter said.As per the proposal, the company has offered to pay around Rs 1,200 crore in upfront cash to the lenders which include Axis Bank, SBI, Bank of Baroda, PNB, Canara Bank, and Bank of Maharashtra.
The outstanding loan of the company as on March 31, 2022, is around Rs 2,200 crore.According to sources, Reliance Power’s OTS offer is supported by Varde Partners of Singapore, which is already an investor in another group company, Reliance Infrastructure Ltd.VIPL operates a coal-based project with a capacity of 600 MW (2×300 MW) at the Butibori Industrial Area in Nagpur, Maharashtra.
Post the CFM ARC offer, National Asset Reconstruction Company Limited (NARCL) had also made an offer of Rs 1,150 crore to the VIPL lenders, but out of this only 15 per cent is payable in upfront cash, while the balance will be paid in interest-free installments, over the next 5 years. The net present value of NARCL’s offer is only Rs 850 crore.Compared to this, the Rs 1,200 crore all-cash offer by Reliance Power is significantly higher and attractive for the lenders of VIPL.Sources said the lenders of VIPL are likely to meet soon to consider the proposal.