Shareholders approve Reliance Power-RNRL merger | business | Hindustan Times
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Shareholders approve Reliance Power-RNRL merger

business Updated: Sep 06, 2010 15:53 IST
IANS
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Shareholders of Reliance Power and Reliance Natural Resources have approved the merger of the two Anil Dhirubhai Ambani Group (ADAG) companies in a $11 billion all-stock deal.

The conversion rate is four shares of Reliance Natural for every Reliance Power share. The exchange ratio was based on the valuation made by global consultancy firm KPMG.

ADAG in a statement on Monday said the deal would bring "substantial benefits" to shareholders of both the companies, as it would accelerate Reliance Power's plans to set up gas-based power plants of over 8,000 MW capacity.

It would also expedite a gas supply agreement with Mukesh Ambani-controlled Reliance Industries.

Shareholders will gain from four coal-bed methane blocks of Reliance Natural and a 10 per cent share in an oil and gas block in Mizoram.

The merged entity will also see cost efficiency for fuel supplies through Reliance Natural’s coal supply logistics and shipping business.

According to the statement, 80 per cent of Reliance Natural Resources shareholders also hold equity in Reliance Power, and had got their stake free of cost when the original Reliance business was split.

"Reliance Power will have over 6 million shareholders, the world’s largest shareholding family, upon completion of the deal."

Reliance Power touched a intra-day high at Rs 160.70, rising 2.7 per cent from its previous close of Rs 156.45.

The RNRL scrip moved up 3.98 per cent to touch the day's high at Rs 40.45.