Shares of Reliance Defence and Engineering Ltd. jumped as much as 9 percent, the most in nearly a year, after the Anil Ambani-backed firm received approval from an RBI-appointed panel to exit the Corporate Debt Restructuring scheme.
As part of the refinancing scheme approved by lenders, the door-to-door tenure of Reliance Defence's term loans of about Rs 6,800 crore stand extended to 18 years, the company said in its stock exchange filing.
“…existing debt of about Rs 650 crore will also be converted into equity shares at a price of Rs 59.35 per equity share,” the filing added. The company said it has already received 100 percent shareholder approval for the allotment on March 20.
Exiting CDR is also expected to provide increased financial manoeuvring to the company. Reliance Infrastructure has increased its shareholding in Reliance Defence to nearly 31 percent. Reliance Defence's current order stands at over Rs 5,300 crore from the Navy, the Coast Guard and commercial vessels.
Reliance Infrastructure had acquired Pipavav Defence and Offshore Engineering Co. Ltd in March 2015, which was later renamed as Reliance Defence and Engineering. Immediately after the acquisition, Reliance Group had announced its plans to exit CDR.
Earlier, the Reserve Bank of India (RBI) had also given its nod to Reliance Defence to exit the CDR package.
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