NEW DELHI (Metro Rail News): The Delhi Metro Rail Corporation (DMRC) has started a rights issue to generate Rs 7,131.28 crore to pay Delhi Airport Metro Express Private Ltd (DAMEPL) by the arbitration award.
The metro rail corporation has decided to issue shares with a face value of Rs. 1,000 each for a total of Rs. 7.13 crore. The rights issue has begun and will end on January 11, next year. The corporation announced the rights issue for both of its equity partners, the Government of India (GOI) and the Delhi government, according to the minutes of the 147th meeting of the Board of Directors of DMRC. The DMRC has so far declined to comment on the situation.
According to the meeting minutes, the DMRC, a joint venture between the Delhi government and the Government of India, has asked both parties to contribute Rs 3,565.64 crore each as equity. A company can generate more capital by issuing new equity shares to its current shareholders through a rights issue. At its meeting on December 13, the DMRC Board of Directors approved the rights issuance.
The GOI and Delhi government did not respond to DMRC’s proposal to share the entire arbitration award as CAPEX cost, leading to initiating the rights issue.
On September 9, 2021, the Supreme Court affirmed a Rs 7,000 crore arbitration judgement in favour of DAMEPL. The DMRC reportedly attempted to obtain bank loans to pay DAMEPL its award money but then warned the Delhi High Court that doing so would put the business in danger of falling into a debt trap because it would be unable to pay back the loans with its income.
According to reports, the DMRC asked the Delhi and GOI governments for financial support.
Payment to DAMEPL
DMRC launched a Rights issue of Rs 7,131.28 cr
The DMRC decided to offer 7.13 crore shares with a face value of Rs 1,000 each to equity stakeholders- Government of India (GOI) and the Delhi government.
Both stakeholders are to infuse Rs 3,565.64 crore each through their equity contribution.
The same proceeds will be used to pay DAMEPL against the arbitration award.
