Reliance Infra receives Rs 94 cr from Goa, to urge state to pay rest 75%

Reliance Infrastructure on Friday said it has received Rs 94 crore from the Goa government against the arbitration award of Rs 350 crore.

The company will request the Government of Goa to pay the balance of 75 per cent of the arbitral award against bank guarantee immediately as per a recent Niti Aayog circular, RInfra said in a statement.

The proceeds will be used to pay lenders and reduce the debt of company, it said. Reliance Infrastructure, which is sitting on a debt pile of up to Rs 6,000 crore, aims to be debt-free in 2020.

The arbitration tribunal, on February 16, 2018, had ordered the Government of Goa to pay Rs 350 crore, including interest, in favour of Reliance Infrastructure. The arbitration pertains to the delayed payment by the Goa state utility for power supplied from RInfra's 48 MW plant in Sancoale in Goa.

As per the order, the Goa government deposited Rs 50 crore in court in November this year and Rs 44 crore on December 20, RInfra said.

"The arbitral tribunal has also directed that in the event Government of Goa fails to comply with the award, interest at the rate of 15 per cent per annum will be payable in favour of Reliance Infrastructure Ltd," the statement said.

On January 10, 1997, RInfra and the Goa state utility entered into a 15-year power purchase agreement. However, during the term of the PPA, several disputes arose between the parties regarding the computation and payment of invoices raised by the company under the period utilising naptha as well as the subsequent period in which there was a shift to regasified LNG.

As a result, on July 31, 2014, RInfra invoked the dispute resolution provisions under the PPA and the matters were placed before a panel. The company also filed claims before the Joint Electricity Commission in petition 167/2015.

On an application by the state under Section 8 of the Arbitration and Conciliation Act, 1996, the JERC referred the matter to a sole arbitrator on December 11, 2015 for resolution which passed its award in favour of RInfra.

RInfra to cut its Rs 6,000 cr debt, follow capital-light model: Anil Ambani

Reliance Infrastructure (RInfra) which is sitting on a debt of Rs 6,000 crore, is on track to reduce leverage even further as it focuses to be an asset-and capital-light entity, the company said on Monday.

Addressing the shareholders at the AGM, chairman Anil Ambani also said the group's defence businesses will also follow an asset- and capital-light model.

"Our intent is to reduce the debt further. At present we are have around Rs 6,000 crore of debt but with a large networth," the RInfra chairman said, adding the will focus on the domestic market and take up more complex infrastructure and transportation projects.

"We hope to become one of the top five defence companies among the private players in the country, serving the needs of self-reliance and technological advancement and becoming a global supplier. Our defence business in partnership with global leaders will ensure optimum utilisation," he said.

He further said the four business verticals including roads, metro, energy and airport are fully funded.

"Going forward, both the growth engines of E&C and defence businesses will remain asset and capital light without the need for any further large capital infusion," he said.

On the defence opportunity, he further said the defence budget of Rs 3 trillion is a great opportunity for domestic players. "Of the Rs 3 lakh crore budget, Rs 1 trillion is for purchase of new weapons platforms and military hardware. This is a great opportunity for us to participate." The company has its presence in the defence business through two of its joint ventures with French firms Dassault Aviation and Thales.

"Both these joint ventures are operational and the factories are located in Mihan in Nagpur. Both are exporting high technology and high-value products to global markets in both civil as well as defence and aerospace area," he said.

Sounding bullish on the infrastructure space, given an outlay of Rs 100 trillion over the next five years, he said the country's infrastructure needs are very vast.

The government has announced Rs 100 lakh crore investment in infrastructure over the next five years and RInfra will participate in these large scale opportunities and projects which are complex, he said.

The company has bagged a few large orders including the Rs 7,000 crore Versova-Bandra Sealink project and a few metro projects in the megapolis.

On the Delhi Metro arbitration award which is around Rs 5,000 crore, he said, the company had already won the case five years ago and is still waiting to receive the amount.

The transaction of the proposed sale of Delhi-Agra toll roadway, which is expected to fetch RInfra Rs 3,600 crore, is likely to be closed in the next few weeks, he said.

Reliance Infra lenders sign debt resolution pact; stock jumps nearly 11%

Anil Ambani-promoted Reliance Infrastructure (RInfra) on Thursday said its lenders had entered into an inter-creditor agreement (ICA) to implement a debt resolution plan within six months. The announcement led to a rally in RInfra shares, which surged about 11 per cent to close at 51.05 on the BSE.

“RInfra’s 16 lenders have signed the ICA. In accordance with the Reserve Bank of India’s (RBI’s) circular of June 7, 2019, 100 per cent of its lenders have signed the ICA for the resolution of RInfra’s debt,” the company said in a statement. “RInfra has now achieved standstill for 180 days. According to the RBI circular, the resolution plan is to be implemented within 180 days.”

The ICA is for the company’s standalone debt, which was about 6,000 crore as of March 2019.

An ICA allows for all lenders to decide a resolution for the company’s debt collectively. Individual creditors cannot take any separate action in relation to the debt given and collateral taken from the company.

Reliance Infra lenders sign debt resolution pact; stock jumps nearly 11%

The move follows multiple developments in the company and the group in the past one month. Price Waterhouse & Co (PWC) resigned as auditors of Reliance Capital and its subsidiary Reliance Home Finance (RHFL) on June 12. Auditors of RInfra also expressed concerns about the company’s FY19 financial results, stating they were unable to give an audit opinion on the same.

For Reliance Power’s (RPower’s) March-quarter results, auditors flagged the withdrawal from general reserves, depreciation methods, and certain related-party loans. BSR & Co and Pathak HD & Associates are auditors of RInfra and RPower.

A month ago, Reliance Group Chairman Anil Ambani had said the group had paid off debt worth Rs 35,000 crore in the 14 months between April 2018 and May this year largely by selling assets. Weeks later, CARE Ratings downgraded the company to a ‘default’ rating. In its bid to accelerate its asset monetisation, RInfra also announced plans to monetise its Mumbai headquarters real estate through long-term lease in June. In its Thursday announcement, the company further said, “RInfra is confident of implementing its resolution plan well before the 180-day deadline based on advanced progress of its various asset monentisation initiatives.”

The monetisation plan also includes sale of its road portfolio in nine projects. In addition, the company has entered into a sale agreement for its Delhi-Agra toll road for Rs 3,600 crore, which is yet to be completed. In its statement, RInfra said it aimed to be debt-free by 2020.

The timeline is an extension from what Ambani envisaged in August last year. In a press conference then, Ambani had said, “RInfra will be a zero-debt company next year.” RInfra’s consolidated debt was Rs 15,860 crore as of March 2019.

In August last year, RInfra also divested itself of its marquee Mumbai power distribution asset for Rs 12,700 crore. The company has been struggling to sell its road portfolio for the past couple of years, including a failed attempt to use the infrastructure investment trust route.

In a statement on Thursday, RPower said it recast Rs 2,430 crore worth of debt for its Samalkot power project with US-EXIM, extending its final maturity to June 2022. RInfra is a promoter firm for RPower.

Anil Ambani-promoted RInfra loses NTPC order worth Rs 567 crore to GE

While Anil Ambani-promoted Reliance Infrastructure looks to almost double its existing order-book in the current financial year, not all is well with its existing orders. One of RInfra's contracts worth Rs 567 crore from NTPC has been re-tendered and awarded to another company this month.

In February 2018, RInfra informed exchanges it has received the Letter of Approval from NTPC for Flue Gas Desulphurisation (FGD) works of its 3x500 Mw power plant in Jhajjar, Haryana. “The project has been re-tendered and awarded to GE,” said a person with knowledge of the development. The reason for re-tendering is not clear. An email query sent to RInfra last week remained unanswered.

On June 4, GE Power informed exchanges it has won a contract worth Rs 738 crore from Aravali Power Company for Flue Gas Desulphurisation. Aravali Power is a Joint venture company of NTPC, Haryana Power Generation Company and Indraprastha Power Generation Company, which holds the Jhajjar power plant in Haryana.

In its post results media interaction, RInfra pegged its total order book at over Rs 28,000 crore. Queries sent to RInfra on the status of the NTPC projects and whether Rs 28,000 crore includes the project remained unanswered.

For the current financial year, RInfra looks to increase its order book to close to Rs 50,000 crore. In its June 2019 presentation, the company said it targeting opportunities of about Rs 3 trillion in FY20 and bids participation in projects of Rs one trillion and is poised to build order book of Rs 50,000 crore.

The other projects that RInfra is executing include the Versova-Bandra Sea Link, a package for Mumbai Nagpur Expressway, parts of the Mumbai-Metro network, Hirasar airport project in Gujarat and the Kudankulam Nuclear Power Project. Of these, the Sea-link project for Rs 7,000 crore is also facing land and other clearance issues unrelated to RInfra.