Reliance Infra to raise Rs4,300 crore through preferential issue

25 May 2009

Reliance Infrastructure Ltd. (Rel-Infra), one of India's largest private sector utilities, said on Sunday that it would raise Rs4,300 crore ($909 million), through the issue of preferential shares to its promoters and long-term investors to augment the company's capital base in order to take up bigger infrastructure projects.

Additional capital injection would strengthen the net worth of the company by one-third to Rs16,000 crore, and augment its borrowing capacity from Rs24,000 to Rs32,000 crore, at a debt to equity ratio of 2:1.

The preferential offer is subject to approval from the company's shareholders.

Rel-Infra, a company promoted by the Reliance-Anil Dhirubhai Ambani Group (R-ADAG) is involved in power generation, transmission, distribution and trading as well as construction of power plants, roads, MRTS, sea-links, airports and SEZs.

The company announced that it would sell 42.9 million convertible warrants to the promoters, which will be converted into equity shares at Rs1,000 a share, raising the promoters stake in the company from the current 38 per cent to 48 per cent.

Rel-Infra chairman Anil Ambani said, ''We have a great sense of excitement at the unprecedented opportunities unfolding before Reliance Infrastructure, in high growth areas of power and infrastructure development.''