The Hindu : RPL-RIL combine to boost opportunities

Online edition of India's National Newspaper
Tuesday, Apr 09, 2002

Business

Business

RPL-RIL combine to boost opportunities

MUMBAI APRIL 8. The merger of Reliance Petroleum Ltd. (RPL) with Reliance Industries Ltd. (RIL) will enhance the latter's ability to participate in oil exploration and production.

The merger would provide an opportunity in a deregulated petroleum sector and ongoing privatisation of public sector enterprises, the RIL Chairman, Dhirubhai Ambani, said. In the process the equity share capital of the merged entity would be Rs. 1,396 crores, he added.

Addressing the extraordinary general meeting (EGM) seeking shareholders' approval for the merger here today, Mr. Ambani said the aggregate shareholding by Reliance Industrial Investments and Holdings (RIIHL), a subsidiary of RIL, and other RIL associates, might be leveraged to pursue acquisition and growth opportunities in domestic and global markets.

RIL shares, against the holding of RPL shares by RIIHL valued at over Rs. 3,300 crores ($680 million) at current market prices, would be directly issued and allotted to a `trustee.' These shares, representing 7.5 per cent of RIL equity, and would be held for the benefit of RIIHL, he said.

RPL shares held by other RIL associates representing 14 per cent of the petroleum company's equity share capital would be exchanged into RIL shares and would constitute 4.7 per cent of the fully diluted capital of RIL with a value of over Rs. 2,100 crores ($430 million) at current market prices, he said. On benefits from the merger, he said it would directly result in accretion of over Rs. 1,300 crores to RIL's net profit and acquisition of facilities, which have been valued at over Rs. 21,000 crores.

Mr. Ambani said under the proposed terms of merger, shares of RPL held by RIL, representing 28 per cent of RPL's equity share capital would be cancelled. Replying to shareholders' query about sending a management team to leading global multinationals to study the functioning of those organisations, Mr. Ambani said ``it is being done''..

The boards of RIL and RPL had last month approved the merger and recommended an exchange ratio of one share of RIL for every 11 held of RPL.

According to a company spokesman proxies were received in case of 63 crore shares, which represent 60 per cent of RIL's equity share capital. The poll result of the EGM would be known later. — PTI

Shareholders' nod

Our Mumbai Correspondent reports:

The shareholders of RIL today approved the merger of Reliance Petroleum with RIL, at the shareholders' meeting convened under the orders of the Mumbai High Court. ``The resolution was passed with an overwhelming majority representing 99.95 per cent in value of members present and voting,'' Reliance said in a release. The resolution was supported by all categories of shareholders, including international and domestic institutional investors and retail investors.

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