RNRL shareholders, including the promoters, will get Reliance Power shares worth about Rs7,150 crore, as per the current market prices. Out of these, promoters will get shares worth over Rs3,600 crore.
In a mega Rs50,000-crore deal, Anil Ambani group today announced merger of RNRL with another group firm Reliance Power, which would now become a direct beneficiary of the gas deal signed with Mukesh Ambani-led Reliance Industries.
As part of the all-stock deal, Reliance Power will give one of its shares for every four held in RNRL.
RNRL shareholders, including the promoters, would get Reliance Power shares worth about Rs7,150 crore, as per the current market prices. Out of these, promoters would get shares worth over Rs3,600 crore.
The deal comes within days of RNRL signing a revised gas supply deal with Reliance Industries (RIL) for power projects, which are under the charge of Reliance Power.
Following the Supreme Court decision on May 7, wherein its plea was rejected for cheaper gas from RIL, the Anil Ambani group firm RNRL had lost much of its relevance as a business entity.
Announcing the deal, the two companies said in a joint statement "Reliance Power's plans for setting up upto 10,000 MW gas-based power plants (would) be accelerated" and Reliance Power would "derive substantial benefit from RNRL's Gas Supply Master Agreement with RIL".
Ahead of today's board decision, RNRL shares closed at Rs63.65 a piece and Reliance Power at Rs175.15 on Friday.
Stating that RNRL shareholders holding 80% of its capital were also shareholders of Reliance Power, the joint statement said over 80% of shareholders in the former entity got their shares free on demerger with RIL following the family settlement between Ambani brothers.
RNRL was born out of demerger of Dhirubhai Ambani's Reliance empire five years ago. The purpose of creation of RNRL was for sourcing, supply and transportation of fuels, primarily natural gas.
As per the demerger scheme, RNRL was to source natural gas from Reliance Industries and trade it to ADAG power plants, including the proposed mega 7,800mw Dadri unit near New Delhi being set up by Reliance Power.
"RNRL shareholders will benefit from the proposed amalgamation, by participating in future growth prospects of Reliance Power's diversified generation portfolio of 37,000mw and its substantial coal reserves in India and abroad", it said.
On the other hand, Reliance Power would reap benefits from RNRL's coal bed methane blocks, and fuel supplies through the latter's coal supply logistics and shipping business, it said, adding that combined entity would have over sixty lakh shareholders, the largest for any entity in the world.
Referring to the Gas Supplies Masters Agreement signed by RNRL with RIL, it said Reliance would drive "substantial benefit" from it. Besides, gas prospects from RNRL's coal bed methane blocks as also its 10% share in an oil and gas block in Mizoram would be added advantage.
The combined entity would have a net worth of over Rs16,000 crore, including RNRL's net worth of around Rs1,900, it said. The merger would be subject to approvals of the Bombay high court and other regulatory authorities, it added.
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