The board of Reliance Infrastructure, promoted by the Anil Dhirubhai Ambani group, has approved on Sunday to raise about Rs.4, 300 crore of capital through preferential shares to its founders and other investors.
In a statement, the company stated that the equity capital would increase its net worth to over Rs.16, 000 crore and add to its borrowing capabilities to Rs.32, 000 crore at a debt-equity ratio of 2:1. This will help the company to participate in a bigger way in infrastructure projects, the statement said.
Company chairman Anil Ambani stated, "We have a great sense of excitement at the unprecedented opportunities unfolding before Reliance Infrastructure, in high growth areas of power and infrastructure development. The new equity capital infusion reflects our strong confidence in future growth prospects of the Company."
The preferential offer, subject to necessary approvals from shareholders, will be made at Rs.1, 000 per share. According to present guidelines of the market regulator, Reliance Infrastructure will receive 25 per cent of the amount on allotment through an upfront payment of around Rs.1, 075 crore ($228 million), and the balance upon conversion.
The board has also approved cancellation of 43 million equity warrants issued Jan 20, 2008 to the promoters. The open payment of Rs.783 crore made by the promoters against those warrants has accumulated directly to the companys reserves, the statement added.
The effective purchase cost to the promoters, after taking into account the upfront payment of Rs.783 crore, works out to about Rs.1, 183 per share representing a premium of 83 per cent on the average price during the preceding three months, it added.
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