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Global investment firm Varde Partners has signed an agreement to invest in former billionaire businessman Anil Ambani Group’s Reliance Power Ltd (RPL).
“4. On September 2022, RPL and its subsidiary entered into an indicative Memorandum of Understanding (MoU) with Varde Partners to leverage debt of up to 1,200 crores ($150 million) to settle and discharge and/or acquire and restructure certain financial debt of RPL,” it says in RPL’s regulatory filing.
The proposed deal is the second transaction by Anil Ambani-owned Reliance Group, after which Reliance Infrastructure raised Rs 550 crore from Varde Partners in June last year.
Debt withdrawal will be subject to the finalization and execution of binding documents and all necessary consents.
Following the announcement on Monday morning, RPL’s shares, which are listed on the Mumbai Stock Exchange, jumped almost 10% to a price of RSD 23.30 per share on the Belgrade Stock Exchange.
RPL, part of the Reliance Group owned by the brother of tycoon Mukesh Ambani, was formed in 1995 and listed on the stock market in February 2008 after one of India’s largest initial public offerings (IPOs) that helped the firm raise 11,560 crore rupees.
RPL has one of the largest portfolios of energy projects in the private sector, based on coal, gas, hydro and renewable energy, with an operational portfolio of 5,945 megawatts. However, the Reliance Group is struggling with a debt pile that has led lenders to drag at least four of its companies into bankruptcy.
For Varde Partners – a global investment firm focused on credit and distressed assets in India – while this is the second deal with a Reliance group firm, it has other investments, including a recent debt investment in property developer Omake in April and KSK Mahanadi for Rs. 1,622 crore, among India’s single largest debt problems.
Founded in 1993, Varde Partners is among the active investors in distressed assets in India. It manages a total portfolio of around $13 billion worldwide with offices in India, Singapore, Minneapolis, New York, London and several cities in Europe and Asia.
It has been operating in India from its Mumbai office since 2018 and has also partnered with asset redevelopment company Aditya Birla Capital (ARC).
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