Bombay High Court approves merger of Reliance Power and Reliance Natural Resources Ltd
15 October 2010According to Anil Ambani-led Reliance Power and Reliance Natural Resources Ltd (RNRL) the Bombay High Court has approved the merger of both entities.
As per the scheme of arrangement, Reliance Power (RPower) shall issue and allot one equity shares of face value Rs10 for every four equity shares of face value of Rs 5 of RNRL, according to the separate filings of the companies to the Bombay Stock Exchange today.
The record date for determining the persons who would be entitled to the equity shares to be issued and allotted by RPower in the aforesaid ratio, in terms of the Scheme, would be announced later.
With the merger, RPower's shareholder base would expand to over 6 million from the current 3.5 million.
The arrangement would see RPower's net worth rise by over Rs16,000 crore, RNRL contributing about Rs1,900 crore, the filing added.
Additionally, it would also accelerate RNRL's gas supply agreement with Reliance Industries and the implementation of Rpower's plans for setting up over 8,000 MW of gas-based power generation capacity.
Also, the power major would be able to use the gas from RNRL's coal bed methane projects.
RNRL shareholders would also stand to benefit from the substantial coal reserves and growth prospects of Rpower's diversified generation portfolio of 37,000 MW.
Both ADAG firms' shares ended the down with RPower plunging 1.44 per cent to settle at Rs160.40 and RNRL closing at Rs39.50 down 1.37 per cent on the BSE.