Reliance Infra to exit Pipavav Defence CDR programme

The Anil Ambani-led Reliance Infrastructure Ltd, the new owner of Pipavav Defence and Offshore Ltd, on Thursday said it plans to exit the shipyard's corporate debt restructuring (CDR) programme approved by bankers earlier this year for better financial flexibility.

It is subject to approvals from lenders and regulators.

Reliance Infrastructure, which in March bought 18 per cent stake in Pipavav Defence for Rs819 crore along with its wholly-owned subsidiary Reliance Defence Systems Pvt Ltd, has announced an open offer for Pipavav Defence.

''Reliance Infrastructure intends to exit the CDR package that the lenders of Pipavav Defence had approved in March 2015. The exit from the CDR is expected to lead to improved financial flexibility and increased business opportunities for Pipavav Defence, enabling the company to contribute to the security of the country, and pursue the Make in India and Skill India programmes of the Prime Minister of India Narendra Modi, in an even more significant manner,'' Reliance Infrastructure said in a statement.

Reliance Infrastructure, through its subsidiary Reliance Defence, will acquire 130 million equity shares from the promoters of Pipavav Defence at Rs63 per share, the company had said in March.

The open offer by Reliance Infrastructure to acquire 26 per cent more in Pipavav Defence will open on 2 December and close on 15 December.

JM Financial Institutional Securities Ltd will be the sole financial advisor and manager to the offer.

''It is expected that the change of control, reconstitution of the board of Pipavav Defence, and change of name of the company to Reliance Defence and Engineering Ltd, will be completed in January 2016,'' Reliance Infrastructure said.

The company has recently entered the defence sector.

The Maharashtra government has allotted 290 acres at Mihan near Nagpur for the development of Dhirubhai Ambani Aerospace Park.