Reliance Power Ltd said its obligations as a guarantor on behalf of Vidarbha Industries Power Ltd (VIPL) stand fully settled, resulting in the release and discharge of corporate guarantees, undertakings and all obligations and claims in relation to VIPL’s outstanding debt of ₹3,872.04 crore.
Reliance Power has settled all disputes with CFM Asset Reconstruction Pvt Ltd (CFM). All the shares of VIPL have been pledged in favour of CFM against the release and discharge of corporate guarantees given by Reliance Power. CFM became the sole creditor of VIPL after it acquired loans from lenders at ₹1,265 crore in an all-cash deal in September last year. The company had a principal debt of ₹2,800 crore.
According to the terms of the settlement agreement Reliance Power, along with its subsidiaries Rosa Power Supply Company and VIPL, and CFM Asset Reconstruction Private Ltd, have formalised a pact to settle the outstanding debt.
Thereafter, the release deed was executed and Reliance Power and its subsidiaries, Rosa and VIPL, will withdraw all proceedings initiated by them against CFM.
CFM would also withdraw all proceedings initiated by it against Reliance Power and Rosa, which included an insolvency application.