RIL forms 4 SPVs, clears demerger

Anil Ambani says his stand has been vindicated.

The Reliance Industries Ltd (RIL) board today cleared the decks for the demerger of the company's business by creating four new entities in the areas of telecommunications, coal-based energy, gas-based energy and financial services. These are Reliance Communications Ventures, Reliance Energy Ventures, Global Fuel Management Services and Reliance Capital Ventures.

All shareholders of RIL will get shares of the four new firms in a ratio of 1:1. This means RIL shareholders will get one share each of Reliance Communications Ventures (face value Rs 5), Reliance Energy Ventures (Rs 10), Global Fuel Management Services (Rs 5) and Reliance Capital Ventures (Rs 10) for each share held. All the four companies will be listed on the stock exchanges.

"This will unlock value for all shareholders as they can participate directly in all the businesses that RIL has nurtured and brought to stature," an RIL release said.

The appointed date for the demerger scheme is September 1 and is subject to approvals of the BSE, courts of law and shareholders. In the second stage, Reliance Energy Ventures and Reliance Capital Ventures are likely to be merged with two existing companies, Reliance Energy and Reliance Capital.

An Anil Dhirubhai Ambani Enterprises release said the group would have four listed companies"" Reliance Capital, Reliance Energy, Global Fuel Management Services and Reliance Communications Ventures.

Ultimately, for every 100 shares held, an RIL shareholder will have about five shares of RCL, seven shares of REL, and 100 shares each of Global Fuel Management Services and Reliance Communications Ventures, as was indicated by Anil Ambani on Wednesday.

Minutes after the Reliance Industries announcement of the new demerger formula, Anil Ambani said he was glad that the board had accepted his position on fairness, transparency, the need to unlock value, and to increase value for over 2.3 million shareholders.

He said the equity share capital of Reliance Capital Ventures and Reliance Energy Ventures would be Rs 1,223 crore each. Global Fuel Management Services and Reliance Communications Ventures would have an equity share capital of Rs 611 crore each.

FIRST STAGE

RIL shareholders will get one share each of the four SPVs for every RIL share

Reliance Capital Ventures

Reliance Energy Ventures

Global Fuel Management Services

Reliance Communication Ventures

SECOND STAGE

All the 4 SPVs will be listed, after which the derived interest of RIL shareholders in each of the entities will be (for every 100 shares held in RIL):

Around 5 shares in Reliance Capital Ventures

Around 7 shares in Reliance Energy Ventures

100 shares in Global Fuel Management Services

100 shares in Reliance Communications Ventures