Reliance Cap, Energy board meet on Jan 2 & 3

In line with the reorganisation of Reliance Industries Ltd (RIL), the Anil Dhirubahi Ambani Enterprises (ADAE) Group company is planning to merge two of its newly-formed companies - Reliance Capital Ventures Ltd (RCVL) and Reliance Energy Ventures Ltd (REVL) - with Reliance Capital (RCL) and Reliance Energy Ltd (REL).

The group has convened a board meeting of Reliance Capital on January 2 and Reliance Energy on January 3 to seek directors' approval, with January 18 fixed as the effective date for the demerger.

The amalgamation of RCVL with RCL and that of REVL with REL (after approval by the boards) will require all requisite approvals, including that of the shareholders' of both companies, ADAE group said in two separate releases today.

The mergers are to take place under Section 391-394 of the Companies Act 1956, it said.

In an earlier release, the group had said that "this will unlock value for all shareholders as they can participate directly in all the businesses that RIL had nurtured and brought to stature".

According to industry sources, the merger is being done as a part of the efforts to enable RIL's shareholders to have a direct stake in the two-listed listed entities of ADAE group, rather than re-routing through special purpose vehicles (SPVs).

The SPVs were formed for transferring of the companies shares in wake of the settlement between the estranged brothers, Mukesh and Anil Ambani.

Earlier, RIL's board had 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 companies were RCVL, REVL, Global Fuel Management Services Ltd (GFMSL) and Reliance Communications Ventures Ltd.

RIL shareholders were to be given shares of all 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 were also to be listed on the stock exchanges.