Reliance Power’s $500 Million FCCB Deal

Reliance Power to raise $500 million through FCCBs

Shares of Reliance Power fell by 5%, reaching Rs 50.97 in Friday’s trading session, following the company’s board decision to raise $500 million (approximately Rs 4,200 crore) through unsecured foreign currency convertible bonds (FCCBs).

In a press release on Thursday, the company announced that its board had approved the issuance of up to $500 million in FCCBs, carrying an ultra-low interest rate of 5% per annum, with a 10-year tenure. These bonds will be offered on a private placement basis to affiliates of Värde Investment Partners, LP.

The company further stated that the FCCBs can be converted into approximately 82.30 crore equity shares, each valued at Rs 10, with a conversion price set at Rs 51 per share.

This is Reliance Power’s second fundraising initiative, following the board’s approval on September 23 to raise Rs 1,525 crore through a preferential allotment. The proceeds from this allotment will be used to grow business operations, invest in subsidiaries and joint ventures, reduce debt, and address general corporate needs.

The company announced the creation of an Employee Stock Option Scheme (ESOS), which will be managed by the nomination and remuneration committee, also known as the Compensation Committee (NRC). Under this scheme, eligible employees will be granted stock options in accordance with ESOS guidelines.

On Thursday, Reliance Power shares defied market trends, hitting a 5% upper circuit and closing at Rs 53. This surge followed the company’s announcement of plans to develop solar and hydroelectric power projects in Bhutan.