New Delhi, July 4
In a mega Rs 50,000-crore deal, the Anil Ambani group today announced the merger of RNRL with Reliance Power, which would now become a direct beneficiary of the gas deal signed with Mukesh Ambani-led Reliance Industries.

As part of the all-stock deal, Reliance Power will give one share for every four held in RNRL. RNRL shareholders, including the promoters, will get Reliance Power shares worth about Rs 7,150 crore, as per the current market prices. Out of these, promoters will get shares worth over Rs 3,600 crore.

The deal comes within days of RNRL signing a revised gas supply deal with Reliance Industries (RIL) for power projects, which are under the charge of Reliance Power.

Following the Supreme Court decision on May 7, wherein its plea was rejected for cheaper gas from RIL, Anil Ambani group firm RNRL had lost much of its relevance as a business entity.

Announcing the deal, the two companies said in a joint statement: "Reliance Power's plans for setting up up to 10,000 MW gas-based power plants (will) be accelerated" and Reliance Power will "derive substantial benefit from RNRL's Gas Supply Master Agreement with RIL".

Stating that the RNRL shareholders holding 80 per cent of its capital were also shareholders of Reliance Power, the joint statement said over 80 per cent of the shareholders in the former entity got their shares free on demerger with RIL following the family settlement between Ambani brothers.

RNRL was born out of demerger of Dhirubhai Ambani's Reliance empire five years ago. The purpose of creation of RNRL was for sourcing, supply and transportation of fuels, primarily natural gas.

As per the demerger scheme, RNRL was to source natural gas from Reliance Industries and trade it to ADAG power plants, including the proposed mega 7,800-MW Dadri unit near here being set up by R-Power.

"RNRL shareholders will benefit from the proposed amalgamation, by participating in future growth prospects of Reliance Power's diversified generation portfolio of 37,000 MW and its substantial coal reserves in India and abroad", it said.

On the other hand, Reliance Power will reap benefits from RNRL's coal bed methane blocks and fuel supplies through the latter's coal supply logistics and shipping business, it said, adding that combined entity would have over 60 lakh shareholders, the largest for any entity in the world.

Referring to the Gas Supplies Masters Agreement signed by RNRL with RIL, it said Reliance would drive "substantial benefit" from it. Besides, gas prospects from RNRL's coal bed methane blocks as also its 10 per cent share in an oil and gas block in Mizoram would be an added advantage.

The combined entity would have a net worth of over Rs 16,000 crore, including RNRL's networth of around Rs 1,900, it said. The merger would be subject to approvals of the Bombay High Court and other regulatory authorities, it added. — PTI 

New Delhi, June 4
RNRL shareholders must be feeling shortchanged, as they will get one share of R-Power worth Rs 175.1, 45 per cent less than the combined value of Rs 254.6 for four shares they exchange under the merger deal approved today.

In the last trading session, Reliance Power closed at Rs 174.50 a piece, whereas shares of RNRL ended at Rs 63.65. Market analysts have given a mixed opinion about the deal. While some brokers said the deal was good for both ADAG firms, some said R-Power shareholders had an upper hand.

RNRL shareholders, including promoters, will get R-Power shares worth about Rs 7,150 crore, as per the current market prices. Out of these, the promoters would get shares worth over Rs 3,600 crore.

"In terms of business value, the merger deal is good for RNRL... (who) will have more share in ADAG's power projects. Till present, the scrip is more like a trading firm, but post-merger, its value will grow," Angel Broking vice-president, Research, Sarabjit Kour Nangra said.

However, some analysts said the deal value was not so lucrative for RNRL shareholders and would be sweet only after the share price of R-Power breached the combined value of four shares of RNRL.

"RNRL shareholders would have been at better position if the share exchange ratio value was more sweet," said a broker. — PTI 

New Delhi, July 4
Forget weekends. It is business and days of big announcements on Sundays for Anil Ambani, contrary to golf and get-togethers for the rest of the corporate world.

While June 18, 2005 -- the day of separation for Anil from Mukesh Ambani with the division of the Reliance empire -- was a Saturday, it was a Sunday five years later on May 23, 2010, when he announced a patch-up with his elder brother, burying their contentious non-compete agreements.

Since then, there has hardly been a Sunday when he did not pull out his top lieutenants and officials from the comfort of their homes to do business and engage the media for a big exposure in Monday newspapers before the stock markets commence trading for the new week -- a trend that group officials feel is a legacy from the days of his father, Dhirubhai.

Even during the bitter fight with Mukesh, before and after the family settlement, invariably big news came out from ADAG on Sundays -- based on the belief that a lean business day could help get better space in the media.

Commenting on the trend, brokerage firm SMC Global vice-president Rajesh Jain said: "The group probably tries to play safe so that the announcement does not impact the stock prices with a sudden jerk.

"Announcements on a market holiday usually are considered safe, as traders get time to absorb the under-currents of the announcements and then react when the market opens on the next day," he added.

Today also, again a Sunday, boards of two Anil Ambani group companies, Reliance Power and Reliance Natural Resources Ltd, met in Mumbai to decide on their merger.

On the previous Sunday -- June 27 -- the group announced a big-bang Rs 50,000 crore merger deal of RCom's tower assets with GTL Infra to create the world's largest telecom tower firm.

Earlier on June 20, 2010, the Anil Ambani group announced a joint venture between Reliance Broadcast Network with US media giant CBS for capturing the television market in the country.

In the same month, RCom announced on June 6, again a Sunday, that the company was looking for buyers to purchase a 26 per cent stake in the company.

Exactly a week before, Anil had gone to Tirupati on May 30, staying en route at Mukesh's guest house, to seek the deity's blessings for the peace that was ushered in between the two brothers after their years-long bitter rivalry.

The decision for his group's only IPO, that of Reliance Power, was also taken on a Sunday -- September 30, 2007.

As part of the efforts to revive R-Power shares that tanked despite being India's biggest ever IPO at over Rs 11,500 crore, Anil Ambani again announced on a Sunday (February 25, 2008) the issue of free bonus shares.

It was again a Sunday (May 9, 2010) when Anil wrote a morale-boosting letter to his all group employees post the Supreme Court judgment that ruled against RNRL's petition to get gas from RIL as per a family agreement.

In the midst of a years-long legal fight over gas, on yet another Sunday (October 11, 2009), Anil made a passionate appeal for peace with Mukesh, though the very same day, RIL said the litigation was not a family matter. — PTI