India’s Reliance to seek shareholder approval for RPL merger

10 March 2009 16:10  [Source: ICIS news]

NEW DELHI (ICIS news)--India’s Reliance Industries Ltd and its subsidiary, Reliance Petroleum Ltd (RPL), will convene meetings next month to seek the approval of their respective shareholders and lenders for their proposed merger, the two companies said on Tuesday.

Following an order from the Mumbai High Court, which considered Reliance’s merger application on 6 March, the meetings will be held on 4 April.

After securing stakeholder approval, Reliance would need to receive the consent of both the Mumbai and Gujarat high courts.

Following the merger, RPL would be dissolved and Reliance’s authorised equity capital would double to Indian rupees (Rs) 50bn ($965.2m), according to the Reliance Group’s merger scheme.

Reliance’s authorized preference share capital would double to Rs10bn, while the actual paid-up equity capital of the company would increase by 4.4% to Rs16.43bn, according to the scheme.

The amalgamated Reliance would have “unfettered access” to the cash generated by the combined business, which could be deployed more efficiently to fund its expansion projects and acquisitions, according to the scheme.

Reliance would also achieve cost savings and certain other benefits by merging RPL with itself, the scheme said.

($1 = Rs51.80)

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By: Naresh Minocha
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