The accord announced by the Ambani brothers on Sunday evening is likely to be the first of a few realigning their empires that was created on June 18, 2005, according to sources familiar with the development.
The accord announced by the Ambani brothers on Sunday evening is likely to be the first of a few realigning their empires that was created on June 18, 2005, according to sources familiar with the development.
The first step towards this, sources tell us, is that a draft new gas supply agreement between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL) has been sent to the government for vetting — to see if it’s passable under the ambit of the Supreme Court decision of May 8.
Once the Centre clears this — may be as soon as Tuesday — the next step would be to outline the modalities of compensating Anil, sources said.
Compensation essentially pertains to the gap of $1.86 per mBtu of gas, or the difference between the government and Supreme Court-mandated price of gas and that based on the family MoU ($4.2 -$2.34) that Anil will have to pay to get gas for his gigantic power projects.
DNA could not independently verify this with either factions.
Sunday’s deal also has one unseen yet unmistakable stamp on it — that of the family matriarch Kokilaben Dhirubhai Ambani. Sources said she has been firm that she will not have one of her sons losing badly in any settlement process.
“But compensation cannot contravene the Supreme Court order and the ultra-secretive Ambani family memorandum signed five years ago. That throws up many options: Anil sells RNRL to Mukesh, for one. If not, then the prospects of RNRL become really unclear till ADAG’s power plants come up,” said a source.
“The other option is that an existing businesses from the RIL portfolio, such as petrochemicals or retail, being demerged in Anil’s favour,” the source said.
Another is to handover some gas blocks in the KG basin, the source said, so that RNRL and Reliance Power’s future is intact.
There is also talk of Anil getting something in cash.
The RIL promoters’ move to sell treasury stock over the past couple of months, and the realignment of promoter holdings held through investment companies announced on March 31 and April 1 this year could be indicative of these processes, said sources.
Post the new non-compete agreement, sources also said it’s very unlikely that Mukesh will re-enter telecom considering how the sector is poised in the next couple of years, notwithstanding rumours about Mukesh’s links with some new telecom players that had received spectrum for a pittance in 2008 — a decision that landed the Union communications minister Andimuthu Raja in hot soup.
Nor is Anil expected to enter the capital-intensive oil sector, sources said.
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