Reliance Group AGM: RCom Resolution Professional Invites Bids For The Company
Anil Ambani (centre), chairman of Reliance Group, center, with his sons Anmol Ambani (left) and Anshul Ambani at company’s annual general meeting in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Reliance Group AGM: RCom Resolution Professional Invites Bids For The Company

Five companies of the Anil Ambani-led Reliance Group held their annual general meetings in Mumbai today, against the backdrop of debt-related concerns at key firms of the conglomerate.

The five Reliance Group companies that held their AGMs today were:

  • Reliance Capital Ltd.
  • Reliance Infrastructure Ltd.
  • Reliance Power Ltd.
  • Reliance Home Finance Ltd.
  • Reliance Communications Ltd.

The RCom AGM was the first instance of a court-appointed resolution professional addressing shareholders. Ambani addressed shareholders of the other four companies. Here are the key takeaways from the Reliance Group AGMs:

Resolution Professional Invites Bids For Reliance Communications

Reliance Communications Ltd.’s resolution professional has invited investors to bid for the debt-laden telecom company. "Bids are in the process of getting invited,” Aneesh Nanavati said at the RCom AGM in Mumbai on Monday.

Anil Ambani’s telecom venture re-entered India’s bankruptcy courts on Apr. 30 aftera failed RCom-Reliance Jio deal. The National Company Law Appellate Tribunal allowed RCom to withdraw its appeal against insolvency proceedings initiated last year and lifted interim orders that temporarily halted the bankruptcy case.

“The debt resolution plans will be on the basis of what investors think of the company," Nanavati said at the AGM.

“Our effort is to maximise the value of plan...all transactions will be scrutinised by the court. We have got an extension of three months (on debt resolution) from NCLT. Jan. 10 is the last date for the process to conclude,” he added.

He claimed no information on personal guarantees of promoters.

According to the resolution professional, RCom has received claims worth Rs 84,268 crore from lenders, details of which have been published on the company’s website.

Asset Management Mismatch Reason For Defaults, Says Reliance Home Finance CEO

A mismatch in asset management is one of the reasons for defaults, Reliance Home Finance Ltd.'s chief executive officer Ravindra Sudhakar said at the company’s AGM in Mumbai today.

“Loan given to the non-housing sector were more than housing loans,” said Sudhakar, adding that cost of borrowings from banks have gone up significantly. “Most of the HFCs (housing finance companies) are finding it difficult to get funds.”

The CEO, however, is bullish on the affordable housing segement.

“We are supporting affordable housing...the future of the (real sector) sector is to look at affordable housing,” Sudhakar said.

Commotion At Reliance Power AGM After Anil Ambani’s Speech

Commotion reigned at Reliance Power Ltd.’s AGM even as Chairman Anil Ambani claimed that the company is among India’s Top-3 private power generation firms.

After Ambani’s speech, a shareholder claimed that he has lost money due to the debt troubles at Reliance Power. He said he is contemplating to file a class action suit against the Reliance Group.

Reliance Power is committed to cleaner and greener power by reducing emissions and, towards that endeavour, is undertaking a capital expenditure of Rs 4,000 crore to install flue-gas desulfurization units in its coal-based plants, Ambani said during his speech at the AGM. The company is also growing its renewable energy portfolio, making Reliance Power a "Future Green" company.

Reliance Power is banking on its power projects in Bangladesh to "completely retire the US EXIM debt of about Rs 2,400 crore", said Ambani. The company's focus now is on the development of Phase-II of 1,500 MW in Bangladesh, in line with the MoU signed for the development of 3,000 MW of gas-based projects, the chairman said.

Reliance Capital has also signed a joint venture agreement with Japan's JERA Co. Inc. to set up a 750 megawatt, gas-based power plant at Meghnaghat.

R-Infra Debt Now Under Rs 6,000 Crore, Says Anil Ambani At AGM

Reliance Infrastructure Ltd.'s debt is now less than Rs 6,000 crore and the company is on course to reduce it further, Chairman Anil Ambani said at the R-Infra AGM Monday.

That is due to Reliance Infrastructure's deleveraging exercise—the company has sold multiple assets, including its Mumbai power business to Adani Group, and is in the process of monetising the Delhi-Agra Toll Road project. Reliance Infrastructure also plans to sell its Mumbai office to pare debt.

Also read: Reliance Infrastructure Finally Enters Formal Debt Restructuring 

“The sale of Delhi-Agra toll road is awaiting final approvals. The transaction should close in the next few weeks,” Ambani said.

Speaking about the company’s power distribution vertical, the chairman said the Delhi business is now twice the size of its Mumbai market. “We cater to two-thirds of Delhi’s population,” he said.

On transportation and highway projects, Ambani said Mumbai Metro Phase 1 has completed five years with zero accidents and zero fatalities. “Every day, nearly five lakh Mumbaikars depend on our pocket- and eco-friendly metro service.”

Also read: Lenders To Reliance’s Mumbai Metro Accept Debt Restructuring Plan

The company's Delhi Airport Metro project, however, continues to be a pain point as the arbitration case relating to it will now be heard in the Supreme Court.

In January this year, the Delhi High Court set aside the over Rs 4,500-crore arbitration award in favour of Reliance Infrastructure's subsidiary Delhi Airport Metro Express Pvt. Ltd., which had pulled out from running the metro line over safety issues, saying that the arbitral tribunal had not considered that the tracks were certified as safe for commercial operations.

Ambani, meanwhile, is bullish on the prospects of the firm’s engineering-construction and defence businesses. The company has won the rights to develop the $1 billion Bandra-Versova sea link project.

“It will be completed in five years from the zero date, which will likely be announced after the Maharashtra elections," Ambani said, adding that Reliance Infrastructure is in no way involved in the Mumbai Coastal Road project. “The stay on the coastal road project will not impact the Bandra Versova Sea link project.”

Reliance Capital Lenders To Get Rs 15,000 Crore More By March

Reliance Capital Ltd. plans to repay Rs 15,000 crore more to lenders by March, Chairman Anil Ambani said at the company’s AGM today. Reliance Capital will no longer be in the lending business, he said, but will be a financial shareholder in Reliance Home Finance and Reliance Commercial Finance.

In the last two years, the company has suffered collateral damage, Ambani said. “Even (in) these extremely challenging times, (the) group has paid over Rs 34,000 crore in the last 14 months and will pay another Rs 14,000 crore by March 2020,” said Ambani. “We have received zero funding from any bank, NBFC or financial institution.”

Reliance Group has more than Rs 60,000 crore worth of receivables stuck in regulatory matters, the chairman said. Reliance Capital is a young company, he said, whose number of shareholders has risen by over 10 lakh over the past six months.

On pivoting Reliance Capital as a financial services-only company, Ambani said the company’s “strong presence” in the entire segment is safe. “Last week, we have closed transaction with Nippon Life Insurance. Reliance General Insurance business is adequately capitalised. (I’m) confident we will emerge even stronger.”

On Saturday, Reliance Capital announced the completion of 21.54 percent stake sale in its mutual fund arm Reliance Nippon Life Asset Management Ltd. to joint venture partner Japan's Nippon Life Insurance for Rs 3,030 crore.

Also read: Reliance Capital’s $5 Billion Debt at Risk After D Rating

One of the shareholders at the AGM raised concern over the company’s auditor not being present at the meeting, to which Ambani said he will address the shareholder’s concern later. “Legal advisers have taken all necessary steps to see that long-term shareholders are protected,” he said. “The auditor’s stand had a deep impact on shareholder value. Rating agencies’s actions also impacted the group.”

“Our long-term objective in very clear—release all pledged shares... We hope the truth will prevail and the reality will come out.”

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