Värde Partners, a global investment firm focused on credit and distressed assets in India, has signed an agreement to invest in former billionaire businessman Anil Ambani group’s Reliance Power Ltd. (RPL).
“On September 4, 2022, RPL and its subsidiary entered into a indicative Memorandum of Understanding (MoU) with Varde Partners for availing debt of up to ~ ₹1,200 crore ($150 million) for settlement and discharge and/or acquisition and restructuring of certain financial debt availed by RPL,” a regulatory filing by RPL said.
The proposed deal is the second such transaction by the Anil Ambani group company followed by a ₹550 crore fundraise by Reliance Infrastructure from Värde Partners in June last year.
The drawdown of the debt will be subject to finalization and execution of binding documents and all requisite approvals.
After the announcement on Monday morning, shares of RPL, listed on the stock exchanges, jumped nearly 10% to touch ₹23.30 apiece on the BSE.
RPL, part of the Reliance Group owned by the brother of billionaire Mukesh Ambani, was formed in 1995 and got listed in February 2008 after one of the biggest India initial public offerings (IPOs) that helped the firm raise ₹11,560 crore.
RPL has one of the largest portfolio of power projects in the private sector, based on coal, gas, hydro and renewable energy, with an operating portfolio of 5,945 megawatts. However, the group has been struggling under a pile of debts leading to at least four of its companies being dragged to the bankruptcy process by its lenders.
For Värde Partners, this is the second deal with the Reliance group firm, while it has other investments including the recent debt investment in real estate developer Omaxe in April and KSK Mahanadi for ₹1,622 crore, among the single largest distressed debt deals in India.
The US investor is among the three resolution applicants shortlisted to buy out two stressed Srei Group companies.
Founded in 1993, Värde Partners is among the active distressed asset investors in India. It manages a total portfolio of around $13 billion globally with offices in India, Singapore, Minneapolis, New York, London and few cities in Europe and Asia.
In India, it operates from its Mumbai office since 2018 and has also partnered with Aditya Birla Capital’s asset reconstruction company (ARC).
