Reliance Power Limited has informed the Exchange about Pendency of Litigation(s)/dispute(s) or the outcome impacting the Company
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Reliance Power has informed the exchanges that its subsidiary, Samalkot Power Limited, has started arbitration proceedings against the US Export Import Bank and Citibank N.A. (acting as Facility Agent) at the London Court of International Arbitration. The dispute relates to an Amended and Restated Credit Agreement dated June 28, 2019, with the subsidiary arguing that the debt is not yet due as of June 30, 2025. Reliance Power has also formally told US Exim Bank and the Facility Agent that since there is no default, the corporate guarantee provided by Reliance Power cannot be invoked. The matter pertains to the Samalkot power project financing.
This is a proactive legal move by Reliance Power to defend against any potential claim or guarantee invocation on a subsidiary's overseas debt. The outcome of the arbitration could affect the company's contingent liability exposure. Near-term stock impact may be limited, but investors should watch for developments as it involves a significant overseas financing arrangement.