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Reliance Infrastructure (RInfra) announced a strategic move to bolster its financial standing, aiming to raise a substantial Rs 2,930 crore through the issuance of Foreign Currency Convertible Bonds (FCCBs). The board of directors approved this fundraising initiative, which will see the company issue up to 350 FCCBs, each valued at $1 million, aggregating to a total of $350 million. These FCCBs will be issued to VFSI Holdings Private Limited, an affiliate of Värde Investment Partners, LP, a prominent global alternative investment firm.
The FCCBs are designed to be unsecured and carry an attractive “ultra-low cost coupon” of five per cent per annum, with a maturity period spanning ten years. Importantly, these bonds will be convertible into equity shares of RInfra at a price of ₹330 per share, as outlined in the company’s stock exchange filing. This conversion feature provides an avenue for investors to potentially benefit from potential future appreciation in the company's share value.
Beyond the FCCB issuance, RInfra's board also gave its nod to an Employee Stock Option Scheme (ESOS) for all employees of the company and its subsidiaries. This ESOS program will enable the granting of up to 26 million fully paid-up equity shares, representing approximately five per cent of the company’s fully diluted capital. The ESOS is a strategic move to incentivize employees and enhance their commitment to the company's growth trajectory.
This latest fundraising effort by RInfra comes on the heels of two other significant capital-raising initiatives. On September 19, the company announced a preferential issue worth Rs 3,014 crore and a qualified institutional placement (QIP) of Rs 3,000 crore. These transactions, coupled with the current FCCB issuance, demonstrate RInfra's commitment to strengthening its financial position and pursuing strategic growth opportunities.
RInfra's proactive debt management strategy has been evident in recent months. On September 18, the company announced a reduction in its standalone external debt to Rs 475 crore, down from Rs 3,831 crore. This significant decrease reflects RInfra’s commitment to streamlining its financial structure and improving its overall financial health. Further underscoring this commitment, Rosa Power, a subsidiary of Reliance Power, recently pre-paid Rs 850 crore of debt to Singapore-based lender Varde Partners, demonstrating its focus on clearing liabilities ahead of schedule.
RInfra’s total market capitalization currently stands at around Rs 13,111.94 crore. The company's shares closed at Rs 332.15 on the Bombay Stock Exchange (BSE). This fundraising initiative, coupled with its debt reduction efforts, positions RInfra to navigate the dynamic market landscape and capitalize on emerging growth opportunities in the infrastructure sector.
Source: RInfra board approves proposal to raise Rs 2,930 crore through FCCBs