Reliance Power tanks 10% as firm sets VFSI preferential issue price at 27% discount

Shares of Reliance Power (RPL) hit the 10 per cent lower circuit of Rs 19.2 in Friday's trade after the company said it will raise Rs 933 crore by offloading a 15 per cent stake to VFSI Holdings.

The company announced the issuance of shares via private placement basis at Rs 15.55 per share, which is at a discount of 27 per cent against the previous close of Rs 21.30.

In the filing with the exchanges, the company said the Board of Directors on Thursday approved the issuance of up to 60 crore equity shares and/or warrants convertible into equity shares through preferential allotment on a private placement basis to VFSI Holdings Pte. Limited.

VFS Holdings is a subsidiary arm of Varde Investment Partners LP, a global alternative investment firm.

On Monday, RPL and its subsidiary said they have entered into an agreement with Varde Partners, for availing debt of up to Rs 1,200 crore ($150 million) for settlement and discharge and/or acquisition and restructuring of certain financial debt availed by RPL.

"The drawdown of the debt will be subject to finalization and execution of binding documents and all requisite approvals including regulatory approvals as per applicable rules/ laws/ regulations," RPL had said in a regulatory filing, Monday.

Reliance Power, an Anil Ambani-led power entity, is in the business of developing and operating power projects both internationally as well as in India.