Reliance Power makes a higher offer to lenders for Vidarbha Industries

Reliance Power has presented lenders of its Vidarbha Industries Power subsidiary a revised and improved debt settlement offer of Rs. 1,260 crore. After competitor CFM Asset Reconstruction Co improved its bid, Reliance Power improved its offer. Lenders received a report on an offer from the government-owned National Asset Reconstruction Company (NARCL) on March 30, CFM ARC's offer on April 1, NARCL's report on an offer on April 1, and the promoter's settlement offer on May 22. Initially, CFM ARC offered the lenders '1,120 crore, while NARCL offered '1,150 crore, and Reliance Power made a '1,200 crore settlement offer.

The upfront payment offers from Reliance Power and CFM were superior than NARCL's mix of cash and a security receipt. At the beginning of the month, CFM ARC raised its bid to '1,220 crore, while Reliance Power made a revised offer of '1,260 crore. Varde Partners, which invested '930 crore and took a 15% ownership position in the company in September of last year, supports the promoter's offer. Reliance Power dedicated to maximising the value for its lenders.

Our plan and the Swiss challenge ensure that value and transparency are maximised. CFM ARC received no response. After the lenders auction the company's loans, the conflict over controlling Vidarbha Industries might come to an end. According to the individuals indicated above, Reliance Power and CFM ARC have suggested to lenders that their offer be taken into consideration as an anchor offer at the Swiss challenge auction.

In a Swiss challenge auction, the anchor bidder benefits strategically since it has the first opportunity to match any counteroffer made by lenders. The offers from the promoter and the two ARCs will be decided on by a group of lenders, comprising State Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank, Canara Bank, and Bank of Maharashtra, next week. The company's debt of $3,646 crore gets a "D," or default category, rating from Icra Ratings. However, one of the informed parties said that the loans had been lowered to "2,200 crore."