Anil makes open offer for Rel Cap

Offer at Rs 231 a share for 20% paid-up equity.

Anil Ambani today announced an open offer for 20 per cent paid-up equity of Reliance Capital Ltd (RCL), the financial services company now under the Anil Dhirubhai Ambani Enterprises group.

The open offer has been made at Rs 231 a share, nearly 25 per cent lower than today's closing of Rs 289 on the Bombay Stock Exchange, but Rs 3 per share more than what he had committed to invest in the company on Sunday.

Anil will spend Rs 1,188 crore for the open offer if it is fully subscribed. This is over and above his commitment to invest Rs 2,000 crore in preferential shares of the company.

The offer, to open on August 11, is not subject to any minimum acceptance level. It will close on August 30.

The offer follows the RCL board's decision on Sunday to allot 60 million preferential shares of Rs 10 each and 41 million warrants, attaching rights to convert them to equity shares, to Anil for Rs 228 a share. The RCL board had also decided to issue up to 29 million equity shares to financial institutions.

Market sources said the open offer price might be revised, considering its difference with the ruling market price. However, merchant banking sources said a decision on price revision would be taken seven days before the closure of the offer.

The acquirers "" Anil and his newly-floated AAA Enterprises "" will have maximum 32.03 per cent or minimum 27.74 per cent of the voting rights of RCL after the preferential issue, depending on the number of shares issued to the financial investors. On full subscription of the proposed open offer, Anil's stake will go up by 20 per cent.

As of today, Anil and his wife, Tina, hold a combined 0.28 per cent stake in RCL. AAA Enterprises, which has Anil and Tina as directors, is yet to commence operations.

RCL promoter Reliance Industries' holding in the company will come down from 32 to 27 per cent, depending on the subscriptions of the investors following the issue of preferential shares.

This holding will ultimately be transferred to AAA Enterprises, in line with the settlement reached between the Ambani brothers last week. On Sunday, Anil had announced that RCL would be repositioned as a full spectrum financial services powerhouse.

Closing in

• Offer opens on August 11 and closes on August 30
• Anil will spend Rs 1,188 crore if it is fully subscribed
• This is over and above his commitment to invest Rs 2,000 crore in preferential shares