Reliance Power Subsidiaries Resolve Rs 1,023-cr Debt

In a move that significantly improves Reliance Power’s financial health, two of its subsidiaries – Kalai Power Pvt Ltd and Reliance Cleangen Ltd – have settled a total debt of Rs 1,023 crore with Reliance Commercial Finance Ltd (RCFL), a subsidiary of Authum Investment & Infrastructure Limited. This debt settlement comes amidst Reliance Power’s ongoing efforts to achieve financial stability by March 31, 2024.

Reliance Power’s Multi-Pronged Approach to Debt Reduction

The news of the debt settlement follows Reliance Power’s recent strategic asset sales aimed at reducing its debt burden. In December 2023, Kalai Power sold the development rights of its proposed 1,200 MW hydro-electric project in Arunachal Pradesh to THDC India Ltd for Rs 128 crore. Additionally, a few days before the debt settlement announcement, Reliance Power sold its 45 MW wind power project in Maharashtra to JSW Renewable Energy for Rs 132 crore. Analysts believe these asset sales not only helped Reliance Power reduce debt, but also allowed them to streamline their portfolio by focusing on core business areas.

Positive Signs for Reliance Power’s Future

By settling this debt and strategically exiting non-core assets, Reliance Power inches closer to its goal of financial stability. This achievement could potentially improve investor confidence and credit ratings, paving the way for future growth opportunities. Reliance Power has ambitious plans for renewable energy expansion, and a stronger financial footing will be crucial for securing investments and executing those plans.

It’s worth noting that Reliance Power’s debt reduction strategy isn’t solely reliant on asset sales. The company has also been focusing on expediting recoveries from receivables and optimizing its working capital cycle. This multi-pronged approach indicates a well-rounded strategy to achieve long-term financial health.

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