Reliance Power, RNRL seal Rs 50,000-cr merger
Anil Ambani-controlled Reliance Power Ltd and its affiliate firm Reliance Natural Resources Limited on Sunday approved a Rs 50,000 crore market value merger deal, marking the latest episode in a corporate saga after the Ambani brothers reached an agreement over a gas dispute. HT Correspondent reports. Fuel linkagesUpdated: Jul 04, 2010 23:05 IST
The boards of Anil Ambani-controlled Reliance Power Ltd (RPL) and its affiliate firm Reliance Natural Resources Limited (RNRL) on Sunday approved a Rs 50,000 crore market value (about $11 billion) merger deal, marking the latest episode in a corporate saga after the Ambani brothers reached an agreement over a gas dispute.
The boards approved an exchange ratio of 1 equity share of Reliance Power for every 4 equity shares of RNRL, based on valuation made by KPMG.
The merger comes days after elder brother Mukesh Ambani’s Reliance Industries Ltd (RIL) and RNRL announced the signing of a revised gas supply master agreement (GSMA).
“RPL and its shareholders will derive substantial benefits from the proposed amalgamation including gas supply under RNRL’s GSMA with RIL facilitating accelerated implementation of RPL’s plans for setting up over 8,000 mw of gas based generation capacity,” the companies said in a joint statement.
The Supreme Court had asked the two groups to renegotiate the agreement under the government’s gas use policy.
The group would now move the government seeking allocation of gas to its power plants, including its upcoming projects in Dadri in Uttar Pradesh.
Government sources told HT that the empowered Group of Ministers (eGoM) may now consider gas pricing and “informal allocations” will be made to RPL’s upcoming power projects.
Under an earlier family pact, RNRL had sought to pay $2.34 per unit for 28 million units a day of gas from the KG-D6 block of RIL in the Krishna-Godavari basin for 17 years.
After the court verdict, the two brothers reconciled their differences on May 23 and subsequently signed a new pact.