DMRC launches Rights issue worth Rs 7,131.28 cr
NEW DELHI: The Delhi Metro Rail Corporation (DMRC) has launched a Rights issue of Rs 7,131.28 crore for its equity stakeholders, i.e. Government of India (GoI) and Delhi Government. In the Rights issue, DMRC is offering 7.13 crore shares with a face value of Rs. 1000 each. The Rights issue has opened on Thursday and will close on January 11, 2023.
DMRC, which is a 50:50 joint venture of the GoI and the Delhi Government, has requested both stakeholders to infuse Rs 3,565.64 crores each by way of their equity contribution.
Under the Rights issue, a company issues new equity shares to the existing shareholders to raise fresh funds.
DMRC will use the proceeds from the rights issue to satisfy the Arbitral Award in favour of Delhi Airport Metro Express Pvt. Ltd. (DAMEPL).
The Rights issue was approved by the Board of Directors of DMRC in a meeting held on December 13, 2022.
The decision to launch the Rights issue has been taken after DMRC failed to get any response from the GoI and the Delhi Government on its request to share the total arbitration award as CAPEX expenditure. The Supreme Court had upheld an Arbitration Award of Rs 7,000 crores in favour of DAMEPL on September 9, 2021. Earlier, DMRC tried to raise loans from banks for the payment of award money to DAMEPL, but later on, it informed the Delhi High Court that if the company raises debt from the banks, it will fall into a debt trap as it cannot service the debt through its revenue.
DMRC then approached the GoI and the Delhi Government for financial assistance. A meeting to this effect was held on 10 November between the top officials of the Ministry of Housing and Urban Affairs (MoHUA), the Delhi Government, and leading banks, but the DMRC did not get any funds from both its equity stakeholders and now it has launched a Rights issue to raise funds for making a payment to DAMEPL.
DAMEPL's execution petition is pending in the Delhi High Court. On Wednesday, the Supreme Court directed the Delhi High Court to ensure that the arbitration award is executed within three months.
