Two of Anil Dhirubhai Ambani Group firm--Reliance Power Ltd., and Reliance Natural Resources Ltd., or RNRL--on Sunday approved a scheme to amalgamate the two companies involving over Rs.50,000 crore or $11 billion in an all-stock deal. The merger, undoing an earlier split, is subject to relevant approvals.
The boards of the two energy firms approved the swap-ratio of one equity share of Reliance Power for every four of RNRL. The exchange ratio was based on the valuation made by the global consultancy firm KPMG.
The group said the deal would bring substantial benefits to the shareholders of both the companies, as it would expedite a gas supply agreement with Mukesh Ambani-controlled Reliance Industries Ltd., or RIL.
The merger will accelerate Reliance Power's plans to set up gas-based power plants of over 8,000-MW capacity. Also, shareholders will gain from four coal-bed methane blocks of RNRL and a 10 per cent share in an oil-and-gas block in Mizoram.
Among other benefits that will accrue to the shareholders of the companies, the company said, are that the merged entity would enhance reliability and cost-efficiency for fuel supplies through RNRL's coal supply logistics and shipping business.
Post-completion, Reliance Power's net worth will increase to over Rs.16,000 crore, adding around Rs.1,900 crore to RNRL.
Also, post-completion, Reliance Power will have over 6 million shareholders, the world's largest shareholding family. Upon completion of the deal, Reliance Power will have over six million shareholders, the world's largest shareholding family.
RNRL shareholders representing around 80 per cent of its capital also hold equity in Reliance Power, and got their shares free of cost on de-merger from RIL.
RNRL's shareholders will benefit from the proposed amalgamation, by participating in future growth prospects of Reliance Power's diversified generation portfolio of 37,000-MW, and its substantial coal reserves in India and abroad, the company said. Reliance Power has three ultra-mega projects on hand--Sasan in Madhya Pradesh, Tilaiya in Jharkhand and Krishnapatnam in southern coastal Andhra Pradesh.
Reliance Power was established to develop, construct and operate power projects domestically and internationally. And, RNRL is engaged primarily in sourcing, supplying and transporting gas, coal and liquid fuels, besides exploring, and distribution gas.
Two of Anil Dhirubhai Ambani Group firm--Reliance Power Ltd., and Reliance Natural Resources Ltd., or RNRL--on Sunday approved a scheme to amalgamate the two companies involving over Rs.50,000 crore or $11 billion in an all-stock deal. The merger, undoing an earlier split, is subject to relevant approvals.
The boards of the two energy firms approved the swap-ratio of one equity share of Reliance Power for every four of RNRL. The exchange ratio was based on the valuation made by the global consultancy firm KPMG.
The group said the deal would bring substantial benefits to the shareholders of both the companies, as it would expedite a gas supply agreement with Mukesh Ambani-controlled Reliance Industries Ltd., or RIL.
The merger will accelerate Reliance Power's plans to set up gas-based power plants of over 8,000-MW capacity. Also, shareholders will gain from four coal-bed methane blocks of RNRL and a 10 per cent share in an oil-and-gas block in Mizoram.
Among other benefits that will accrue to the shareholders of the companies, the company said, are that the merged entity would enhance reliability and cost-efficiency for fuel supplies through RNRL's coal supply logistics and shipping business.
Post-completion, Reliance Power's net worth will increase to over Rs.16,000 crore, adding around Rs.1,900 crore to RNRL.
Also, post-completion, Reliance Power will have over 6 million shareholders, the world's largest shareholding family. Upon completion of the deal, Reliance Power will have over six million shareholders, the world's largest shareholding family.
RNRL shareholders representing around 80 per cent of its capital also hold equity in Reliance Power, and got their shares free of cost on de-merger from RIL.
RNRL's shareholders will benefit from the proposed amalgamation, by participating in future growth prospects of Reliance Power's diversified generation portfolio of 37,000-MW, and its substantial coal reserves in India and abroad, the company said. Reliance Power has three ultra-mega projects on hand--Sasan in Madhya Pradesh, Tilaiya in Jharkhand and Krishnapatnam in southern coastal Andhra Pradesh.
Reliance Power was established to develop, construct and operate power projects domestically and internationally. And, RNRL is engaged primarily in sourcing, supplying and transporting gas, coal and liquid fuels, besides exploring, and distributin gas.
At the BSE, Reliance Power shares are currently trading at Rs.180.50, up by 3.05%, while Reliance Natural shares are trading at Rs.46.95, down by 26.24% from the previous close.
For comments and feedback: editorial@rttnews.com