labels: reliance communications, m&a
Reliance Communications completes corporate reorganisation news
08 September 2006
Reliance Communications Ltd (RCOM) has announced the completion of its corporate reorganisation plan initiated in March 2006. The order of the High Court of Bombay approving the reorganisation has been filed with the Registrar of Companies, and the stock exchanges.

RCOM has now become the primary operating company for the entire telecom business within the ADA Group. The company and its wholly owned subsidiaries own 100 per cent of the networks, facilities, licenses and properties used in its business. After the reorganization, the stake of Reliance Anil Dhirubhai Ambani Group in the company to 66.62 per cent.

These include the nationwide CDMA and GSM wireless networks, the national and intra-city fibre optic networks, the FLAG and FALCON global submarine cable systems, the Reliance World retail chain, the internet data centres, contact centres, network operating centres, and other facilities used in these businesses.

Shareholding: The entire shareholdings of the promoter group in other affiliates will stand exchanged for equity shares of RCOM.

After the reorganization, the market capitalisation of RCOM has increased to Rs62,300 crore ($13.4 billion), making it among the 'top 10' companies in India.

RCOM is part of the benchmark Sensex, Nifty and MSCI indices.

Under the ownership structure resulting from the de-merger of Reliance Industries Ltd (RIL), RCOM did not own a majority stake in any of its principal operating companies or other affiliates and its ownership of its principal operating companies was:

  • 45.34 per cent of Reliance Infocomm Ltd (RIC), which in turn held 100.00 per cent of FLAG Telecom Ltd (FLAG);
  • 45.00per cent of Reliance Communications Infrastructure Ltd (RCIL); and
  • 35.60 per cent of Reliance Telecom Ltd (RTL).

The balance equity shareholdings in RIC, RCIL, and RTL were owned entirely by the promoters. Undeer the terms of the corporate reorganization:

RIC has been merged fully with RCOM and is an now operating division of RCOM RCIL and RTL, and FLAG have become wholly owned subsidiaries of RCOM. In addition, RCOM has acquired the 134-acre Dhirubhai Ambani Knowledge City (DAKC) complex and other properties used in its business, which were previously privately owned.

The corporate reorganisation was effected by way of an exchange of shares under a Scheme of Amalgamation, and did not involve any cash outgo.

Share capital of RCOM: Under the terms of the corporate reorganisation, new equity shares of RCOM are being issued in exchange for the promoters' direct equity shareholdings in RIC, RCIL, and RTL and as consideration for the properties. The issued equity share capital of RCOM will stand at 204.461 crore shares of Rs5 each. The shareholding pattern: Post the corporate reorganisation, the shareholding pattern of the company is as follows:

  • Domestic institutions / Banks / Mutual funds 06.30 per cent
  • Foreign investors - FIIs, NRIs, GDRs, and others 14.15 per cent
  • Indian public 12.93 per cent
  • Reliance Anil Dhirubhai Ambani Group 66.62 per cent

After the de-merger became effective on 21 December, 2005, Reliance ADA Group received control of RCOM on 7 February 2006. It received listing on the BSE and NSE on March 06, 2006. Its GDR listing on LuxX (Luxembourg Exchange) for RIL GDR holders at de-merger came on August 03, 2006.

 It raised $500 million zero-coupon FCCB on March 22, 2006.On 7 June, the name Reliance Infocomm was changed to Reliance Communications Ltd.

 


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Reliance Communications completes corporate reorganisation