Mukesh Ambani-led Reliance Industries (RIL) today raised Rs 2,675 crore by selling a part of its treasury stock to Life Insurance Corporation of India (LIC), to create a war chest to acquire the bankrupt chemicals giant LyondellBasell.
Petroleum Trust, a special purpose vehicle created to hold RIL’s holding in earlier merged subsidiaries, and controlled by RIL management, sold 25.85 million treasury shares,each at Rs 1,035. The sale, second such transaction in less than four months, was at a 5 per cent discount to the stock’s December-31 closing price.
On September 17 last year, the trust had raised Rs 3,188 crore at an average of Rs 2,125 per share. Through the two sales, RIL has so far raised Rs 5,863 crore. It is looking to raise Rs 1,500-2,000 crore more for the Lyondell transaction, said company sources.
RIL is negotiating a deal of $12 billion (Rs 55,600 crore) to acquire LyondellBasell. RIL had Rs 19,421 crore of cash and cash equivalent at the end of September 2009.
Reliance Chemicals, Reliance Polyolefins and Reliance Universal Enterprise hold additional treasury stock to the tune of 5.48 per cent, taking the total pending treasury stock to 10.15 per cent, or 333.85 million shares after today’s transaction. It gives Mukesh Ambani the headroom to raise Rs 35,900 crore more.
With today’s transaction, the promoters’ stake with voting rights in RIL fell to 45.55 per cent, from 46.34 per cent. Also, the three RIL subsidiaries hold the 5.48 per cent stake in treasury stock in the public category, without voting rights. Together, the promoters and promoter group companies hold 51.03 per cent stake in RIL.
LIC, which was the largest institutional shareholder in RIL with 6.04 per cent stake as of September 30, would increase its holding to 6.8 per cent after the 25 million share purchase, said a Mumbai-based analyst.
