RINFRA SELLS MUMBAI POWER UTILITY TO ADANI FOR ₹18,800 CR

MUMBAI: Reliance Infrastructure Ltd’s chairman Anil Ambani on Wednesday completed the sale of its Mumbai city power distribution business to fellow industrialist Gautam Adani for ₹18,800 crore.

Though Reliance Infra has sold one of its profitable business ventures, it will help bolster the company’s financials by repaying debt of ₹13,800 crore from an accumulated debt of ₹22,000 crore.

“For Reliance Infra, this is truly a transformative transaction. RInfra’s gross debt will be reduced from about ₹22,000 crore to ₹7,500 crore, representing a steep debt reduction of 65% in just a single transaction,” chairman Ambani told reporters at a news conference. “RInfra’s annual interest cost will also be reduced by 70% from ₹2,600 crore to ₹800 crore.” The deal will help to narrow RInfra’s debt-equity ratio to 0.3:1, among the lowest in the industry.

To further pare debt, Ambani said he expects arbitration awards of ₹6,000 crore in ongoing cases of Delhi Metro Rail Corporation, Goa Power and National Highways Authority of India, and a ₹5,000 crore inflow from regulatory assets of the Mumbai Power distribution business that are under approval. “We have a further cushion of ₹8,000 crore under arbitration yet to be decided. With these available cash avenues, we expect to be completely debt-free by 2019.”