Reliance Infra-led Metro 1 operator gets Rs 1.1k cr debt relief, avoids insolvency

Mumbai: Mumbai Metro One Pvt Ltd (MMOPL), the operator of Mumbai’s Versova-Andheri-Ghatkopar Metro 1, has secured a major debt restructuring agreement that will reduce its debt burden by more than Rs 1,100 crore, with the insolvency proceedings against the company set to be withdrawn after National Company Law Tribunal (NCLT) took up the matter on Thursday, said sources.The restructuring agreement is valued at Rs 2,771.32 crore.The Mumbai bench of NCLT permitted the withdrawal of the insolvency proceedings following the settlement between MMOPL and govt-owned National Asset Reconstruction Company Ltd (NARCL), according to sources. The formal order is expected to bring to a close insolvency proceedings that had cast uncertainty over the financial future of the operator of one of India’s busiest Metro corridors.As per the terms of the restructuring agreement, NARCL will have the right to nominate a director to MMOPL’s board, while a monitoring committee comprising representatives of the lender and the Metro operator will oversee implementation of the restructuring plan. The agreement also contains covenants requiring MMOPL to obtain the lender’s approval before undertaking certain corporate actions.Reliance Infrastructure, which owns a 74% stake in MMOPL, informed the stock exchanges on Friday that the company had entered into a master restructuring agreement with NARCL on July 9.

The agreement restructures MMOPL’s entire financial obligations towards NARCL and significantly improves the company’s financial position.According to the stock exchange filing, the restructuring will reduce MMOPL’s debt payable to NARCL by over Rs 1,100 crore, based on outstanding dues as of March 31 this year. The agreement also provides for withdrawal of insolvency proceedings.Reliance Infrastructure described the restructuring as “a significant milestone” in resolving MMOPL’s debt and strengthening its long-term financial sustainability.

It said the agreement would enable the Metro operator to continue focusing on the efficient and uninterrupted operation and maintenance of Metro line 1, while placing its finances on a stronger footing.The 11.4km east-west Metro 1 corridor, operational since 2014, carries more than 5 lakh commuters every day and serves as a critical link between the western and the central suburbs. MMOPL is a joint venture between Reliance Infrastructure and MMRDA, which owns a 26% stake in it.