The Board of Directors of Reliance Industries, India’s largest listed firm with a market value of $40.7 billion, have approved a scheme of amalgamation of its subsidiary Reliance Petroleum with the parent company under the provisions of Sections 391 to 394 of the Companies Act, 1956.
In its communiqué to the stock exchanges, the company said that the exchange ratio recommended by both Boards is one share of RIL for every sixteen shares of RPL. RIL will issue 6.92 crore new shares, thereby increasing its equity capital to Rs, 1643 crore.
The scheme will be subject to necessary approvals of shareholders and creditors and sanctions of the High Court of Judicature at Bombay and the High Court of Gujarat at Ahmedabad.
The Board of Directors amalgamation is April 01, 2008. Upon completion of the amalgamation, shareholders of RPL will receive 1 fully paid equity share of Rs 10 each of the company for every 16 fully paid equity shares of Rs 10 each of RPL held by them on the record date to be fixed by the transferee company.
On Friday, shares of Reliance Industries closed at Rs 1,265.05, down 1.97 per cent on the BSE and RPL settled at Rs 76.20, 1.23 per cent in the red.
? RIL-RPL Merger: Swap ratio at 16:1
? Mukesh Ambani: Merger follows enduring philosophy of creating shareholder value.
? RPL shareholders to get 1 RIL share for every 16 held
? RIL to extinguish Treasury Stock, merger to be effective from April 1 2008
? Merger to give no tax relief for RIL
? Merger to be EPS positive
? RIL to issue 6.92 cr shares to RPL shareholder