Latest News | Promoters to Increase Shareholding in RPower, Rinfra: Ambani
Get latest articles and stories on Latest News at LatestLY. Reliance Group chairman Anil Ambani on Tuesday said the promoters of Reliance Power and Reliance Infrastructure have decided to increase their stakes in the respective firms.
Mumbai, Jun 23 (PTI) Reliance Group chairman Anil Ambani on Tuesday said the promoters of Reliance Power and Reliance Infrastructure have decided to increase their stakes in the respective firms.
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Last week, stock market regulator Securities and Exchange Board of India amended the takeover norms to allow promoters to increase their stake by up to 10 per cent through a preferential allotment.
The move is intended to give a boost to promoters wanting to increase their stake and enhance investor confidence as the promoter buying more shares is a good signal to shareholders.
As of March 2020, the promoter holding in RInfra was 14.7 per cent, while in RPower, it was 19.29 per cent.
"The promoters plan to increase the shareholding in the company over time, in line with the applicable regulatory guidelines," Ambani told the shareholders of both these companies during separate virtual annual meetings.
However, Ambani, who kept with the tradition of holding marathon AGMs on one single day, though virtually this time, did not elaborate on the plans of increasing the promoter stake.
Due to the COVID-19 pandemic, the Ministry of Corporate Affairs (MCA) has permitted companies to hold AGMs through video conference / other audio visual means without the physical presence of members at a common venue.
Addressing the shareholders of RPower at its 26th AGM, Ambani said that the company has not availed moratorium of debt granted by the RBI in wake of the coronavirus pandemic for any of the SPVs as it considered the moratorium as a financial penalty.
"RBI has allowed banks to grant moratorium for all principal and interest payments and permitted to defer recovery of interest applied on working capital facilities, but RPower has not availed moratorium of debt in any of the SPVs, as the management considers availing of such moratorium to be a financial penalty," he said.
Ambani further said that he has decided to forego his commission and remuneration for the year from both these companies.
"The management and employees have agreed up to 50 per cent reduction in compensation," he said.
Speaking about the current power situation, Ambani said, "The sector has been going through a challenging phase with low capacity utilization of thermal plants; subdued electricity demand, above target AT&C losses, below cost tariffs, and precarious financial condition of discoms, which has led to ever mounting dues of generating and transmission companies."
He said the regulatory logjam in the sector is evident from long pendency of number of petitions or appeals, which do not reach finality, even after 6-7 years of legal proceedings.
Ambani further said that all the power plants of Reliance Power remained fully operational despite facing COVID-19 and lockdown challenges.
"RPower continues to be one of India's top three private power generation companies with an operating portfolio of around 6000 MW. The PLF levels of the company's thermal power plants stood at 87 per cent for both Sasan and Rosa combined, compared to the national average of about 56 per cent for the year ending March 2020," he said.
On the phase-1 (750 MW) of gas-based power project near Dhaka in Bangladesh, Ambani said the development is on track in partnership with JERA, the largest power utility in Japan.
Last September, RPower concluded agreements with JERA to invest 49 per cent equity in Reliance Bangladesh LNG & Power.
"Samalkot Power has signed an equipment supply contract on March 11, 2020 to sell one module for development of the phase-1 project in Bangladesh, which will help Samalkot reduce outstanding debt by nearly Rs 1,600 crore," he told the shareholders.
He further said the company's focus is now on the development of Phase-2 of 1500 MW in Bangladesh, in line with the MoU signed for development of 3000 MW gas based projects.
"RPower's focus will be on value accretive growth opportunities while remaining financially conservative and capital light - operation and maintenance services for power plants MDO (mine developer and operator) services for coal mines and recently launched commercial coal mining opportunities," Ambani added.
He further said the company will be undertaking a capex of around Rs 3,300 crore this fiscal for installing flue gas desulfurisation in its coal based plants to reduce emissions.
RPower has assets of Rs 53,342 crore and net worth of Rs 11,868 crore and cash flow from operating activities of Rs 4,543 crore.
The company continues to remain conservatively financed with one of the lowest debt to equity ratio of 2.4 : 1.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)