Reliance Power, led by Anil Ambani, has taken proactive steps to settle its outstanding debts with several banks. Last week, the company successfully repaid loans owed to ICICI Bank, Axis Bank, and DBS Bank. Meanwhile, its parent company, Reliance Infrastructure, is also in the process of resolving its dues totaling Rs 2,100 crore with JC Flowers Asset Reconstruction Company.

A senior executive from a commercial bank revealed, "Reliance Power is on track to become debt-free by the end of the fiscal year, with only a working capital loan from IDBI Bank remaining on its books." The three aforementioned lenders, who collectively held around Rs 400 crore of debt, have already recovered approximately 30-35% of their principal loans.

According to disclosures made to the stock exchanges, Reliance Infrastructure and JC Flowers ARC had initially entered into a standstill agreement until March 20, 2024, which has recently been extended to March 31, 2024. Under this agreement, JC Flowers ARC has agreed not to pursue legal action against Reliance Infrastructure until March 31, allowing the company time to arrange necessary funds.

To support its debt repayment efforts, Reliance Power secured Rs 240 crore in equity from VFSI Holdings on March 13. It is believed that the proceeds from this equity infusion were utilized to settle the dues with the aforementioned banks. VFSI Holdings, a subsidiary of Varde Partners, a global asset manager, provided the equity investment.

JC Flowers ARC, after acquiring distressed assets worth Rs 48,000 crore from Yes Bank, including loans extended to Reliance Infrastructure and Reliance Power, has been actively involved in the resolution process.

As of December 31, 2023, Reliance Power's total financial indebtedness stood at Rs 765 crore, while Reliance Infrastructure reported a total financial indebtedness of Rs 4,233 crore for the same period. Earlier in April 2023, Reliance Power had successfully settled loans with JC Flowers ARC and Canara Bank, according to disclosures made to the exchanges.

In September 2022, Reliance Power had allotted 200 million equity shares to VFSI Holdings, of which 25% were subscribed at Rs 80 crore, with the remaining issued as warrants. VFSI Holdings exercised its right to convert warrants into shares, resulting in an infusion of Rs 240 crore.

Furthermore, in August of the same year, Reliance Commercial Finance, now owned by Authum Investment & Infrastructure, invested Rs 1,043 crore in both Reliance companies - Rs 891 crore in Reliance Infrastructure and Rs 152 crore in Reliance Power.

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