Shareholders approve Reliance Power-RNRL mergerSeptember 6th, 2010 - 5:00 pm ICT by IANS
Mumbai, Sep 6 (IANS) Shareholders of Reliance Power and Reliance Natural Resources have approved the merger of the two Anil Dhirubhai Ambani Group (ADAG) companies in a $11 billion all-stock deal.
The conversion rate is four shares of Reliance Natural for every Reliance Power share. The exchange ratio was based on the valuation made by global consultancy firm KPMG.
ADAG in a statement Monday said the deal would bring “substantial benefits” to shareholders of both the companies, as it would accelerate Reliance Power’s plans to set up gas-based power plants of over 8,000 MW capacity.
It would also expedite a gas supply agreement with Mukesh Ambani-controlled Reliance Industries.
Shareholders will gain from four coal-bed methane blocks of Reliance Natural and a 10 percent share in an oil and gas block in Mizoram.
The merged entity will also see cost efficiency for fuel supplies through Reliance Natural’s coal supply logistics and shipping business.
According to the statement, 80 percent of Reliance Natural Resources shareholders also hold equity in Reliance Power, and had got their stake free of cost when the original Reliance business was split.
“Reliance Power will have over 6 million shareholders, the world’s largest shareholding family, upon completion of the deal.”
Reliance Power touched a intra-day high at Rs.160.70, rising 2.7 percent from its previous close of Rs.156.45.
The RNRL scrip moved up 3.98 percent to touch the day’s high at Rs.40.45.
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