How will Anil Ambani pay 71 71.7 million to China in 21 days? It's time to sell more assets

(Commercial Representative) Mumbai Ta. Monday, May 25, 2020

The time has come for Anil Ambani, once one of the richest men in the world, to fall into his debt trap and sell his assets to pay off his debts at home and abroad. A London-based court has ordered Anil Ambani to repay ૭ 215 million in 21 days to a banking consortium headed by the Industrial Bank of China (IBP).

Reliance Infrastructure, part of the Anil Ambani Group, has stopped KPMG from finding buyers to sell its 21 per cent stake in BSES Rajdhani Power (BRPL) and BSES Yamuna Power (BYPL). The Delhi government holds the remaining 8% in these companies.

It is learned that bids have been submitted by three bidders to sell its holding by the Anil Ambani Group. The bid was by India's private power producer-distributors Greenco and Torrent Power, as well as by Italy's largest utility company, Anel Group. In terms of customers, Delhi Electricity Distribution Business is the largest unit in India.

Meanwhile, Reliance Group is putting its enterprise value at Rs 2,000 crore. The asset was shown to several private equity funds, including Brookfield, CDPQ and I-Squared Capital, but only three of those bids are said to have been submitted. The delicacy process for these assets is likely to begin soon.

It may be noted here that Anil Ambani was earlier forced to repay Ericsson's debt by a court order. Last Friday, Anil Ambani was ordered by a London court to pay ૭ 21.50 crore, or Rs 2 crore, to the Chinese banking consortium headed by the Industrial and Commercial Bank of China in just 21 days. The loan was taken by group company Reliance Communications. Earlier last year, Anil Ambani was jailed for delaying payments to Ericsson.

The Mumbai-based power distribution business was sold by Anil Ambani to Adani Transmission Limited in August 2016 for Rs 12,600 crore. The asset was also bid for by Greenco and Torrent. Adani has stayed away from the bidding contest this time, but experts say that Adani is likely to contest at the last minute. Reliance Group and Tata Power supply 3% of Delhi's power supply.

The two BSES companies have more than 3 lakh customers in Delhi and handle the top 4.5 gigawatts of power demand. Last July, power demand in New Delhi reached a peak of 7.5 gigawatts.

Transmission and distribution losses in Delhi have come down sharply after private operators took over power distribution in Delhi. The national average of technical and commercial losses was only 2.7 per cent against the national average of 21.5 per cent.

Meanwhile, for Anil Ambani, the regulator's challenge to sell his assets is still important, critics say, as the director's claims for assets are worth Rs 30,000 crore, though it is yet to be cleared by the director. In FY18, the Delhi Electricity Regulatory Commission (DERC) had approved such claims worth Rs 15,000 crore.

But the Appellate Tribunal for Electricity upheld some of the company's claims and the rest is yet to be shown in the tariff. According to further information, the company owes about Rs 15,000 crore to state power generating companies. So that after the adjustment the enterprise valuation will be kept low.