Synopsis: Reliance Power has come under pressure after the US Export-Import Bank filed an insolvency application over a $165 million debt linked to its subsidiary. The company, however, has strongly contested the claim, stating that the debt is not due and is already under arbitration.
Reliance Power Ltd, part of the Anil Ambani-led group, is engaged in the development and operation of power generation projects across India and overseas. The company has been working towards improving its balance sheet and reducing debt, but recent developments have brought fresh legal challenges into focus.
In a significant move, the Export-Import Bank of the United States (US Exim Bank) has filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 against Reliance Power. The application alleges a default of approximately $165.41 million (Rs. 1,300+ crore) related to its subsidiary Samalkot Power Ltd (SPL), for which Reliance Power had provided a corporate guarantee.
Reliance Power has firmly denied the allegations and stated that the debt is not due, making the insolvency claim legally untenable. The company also highlighted that the matter is already under dispute and has been referred to arbitration.
Its subsidiary, Samalkot Power Ltd, had earlier initiated arbitration proceedings in June 2025 before the London Court of International Arbitration (LCIA) against US Exim Bank and Citibank, arguing that no default had occurred.
If the NCLT admits the insolvency plea, it could trigger the Corporate Insolvency Resolution Process (CIRP), which may significantly impact the company’s operations and investor sentiment. However, since the matter is already under arbitration, the final outcome will depend on legal interpretation of whether the debt is actually due.
Reliance Power’s latest challenge underscores the risks associated with corporate guarantees and legacy debt structures. While the company remains confident about its legal position, the insolvency filing introduces a layer of uncertainty that investors will closely monitor. The coming months will be critical as the case progresses through both Indian bankruptcy courts and international arbitration channels.
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