Reliance Energy board approves 25-per cent share buyback

Anilbhai Ambai Reliance Energy Ltd (REL) says that its board of directors today approved the company's proposed buy-back of outstanding equity shares up to approximately Rs2,000 crore ($500 million), in two phases through stock market purchases from time to time.

The company has announced that it would buy back the shares up to a maximum of Rs1,600 per share, representing a premium of over 30 per cent to the low of Rs1,225 recorded during the calendar year 2008, and a premium of approximately 10 per cent to today's closing share price.

The company said it would finance the share buy-back from its own cash balance and cash equivalents.

With the board's approval to the deal, the Anil Ambani-promoted company will buy back shares up to Rs800 crore in the first phase of the buyback or approximately 10 per cent of the paid-up equity share capital of the company, and its free reserves.

Thias will be followed by a second buyback of 15 per cent of the paid-up equity share capital and free reserves, expending approximately Rs1,200 crore, subject to shareholder and SEBI approvals.

Reliance Energy said in a regulatory filing that it would buy the shares on the Bombay Stock Exchange and National Stock Exchange, through "a transparent mechanism of open market purchases, from time to time".