Reliance Defence likely to exit CDR this week

New Delhi: Reliance Defence and Engineering expects to exit the corporate debt rejig package this week with the lenders agreeing to longer maturity period for loans worth about Rs 6,800 crore.

Besides, lenders would convert debt to the tune of Rs 650 crore into equity, sources said. Post the Corporate Debt Restructuring (CDR), Reliance Infrastructure would have 31 per cent stake in Reliance Defence and Engineering Ltd (RDEL).

Sources said RDEL expects to exit CDR by March 31 and the company's debt worth around Rs 6,800 crore would have extended maturity period of 18 years with lower interest rate.

Further, they said lenders would convert Rs 650 crore debt to equity at a price above Rs 60 per share. When contacted, Reliance Group spokesperson declined to comment.

Earlier, the Reserve Bank of India (RBI) had given nod for RDEL to exit the CDR package. Exiting CDR is expected to provide increased financial flexibility for the company.

The Anil Ambani group firm has an order book worth more than Rs 5,300 crore, including from the Indian Navy and the Indian Coast Guard.

After acquiring Pipavav Defence and Offshore Engineering Co, the Reliance group had renamed it as Reliance Defence and Engineering. Shares of RDEL rose 3.23 per cent to close at Rs 63.90 on the BSE.