Shares of Reliance Power gained attention on Friday after the Anil Ambani company announced that its board approved issuing Foreign Currency Convertible Bonds (FCCBs) worth up to $500 million (approximately Rs 4,200 crore). These bonds will be issued on a private placement basis to affiliates of Värde Investment Partners. The FCCBs will carry an ultra-low annual interest rate of 5%, be unsecured, and have a tenure of 10 years, the company stated.
These FCCBs can be converted into approximately 82.30 crore equity shares of Reliance Power, each with a face value of Rs 10, at a conversion price of Rs 51 per share, which includes a premium of Rs 41 per share.
The conversion price is set at a premium compared to the floor price, which is calculated based on the average of the weekly high and low closing prices in the two weeks leading up to the relevant date. Each FCCB, valued at $1 million, is equivalent to Rs 4,197.50 crore.
In its official statement, Reliance Power said, "We inform you that the board of directors, in its meeting held on Thursday, October 03, 2024, has approved, among other things, the issuance of up to $500 million (approximately Rs 4,200 crore) in FCCBs with ultra-low cost interest of 5% per annum, unsecured, with a 10-year tenure, on a private placement basis to affiliates of Värde Investment Partners, LP."
