The Hindu : IPCL offer: Reliance to forego option

Online edition of India's National Newspaper
Sunday, Feb 22, 2004

Business

Business

IPCL offer: Reliance to forego option

By Our Staff Correspondent

MUMBAI, FEB. 21. Reliance Petroinvestments Ltd. (RPiL) has decided to forego its option of acquiring an additional 5 per cent equity offered in the IPCL open offer as a wider distribution of shareholding would be in greater interest of IPCL.

Earlier, in accordance with the provisions of the Shareholders' Agreement between and the Central Government and as indicated in the preliminary sale document, the Government had offered RPiL the option to purchase up to 5 per cent of the equity share capital of IPCL, namely, namely, 12.411 million equity shares at higher of the offer price and a valuation of Rs. 195 per share, a price determined by an independent valuer.

RPiL is already the single largest shareholder in IPCL. The Reliance group owns 46 per cent of IPCL's equity share capital and has management control of the company. It had earlier acquired the IPCL equity stake at a price of Rs. 231 per share and the current offer from the Government at a price of Rs. 195 per share represents a discount of 15 per cent to the initial acquisition/open offer price.

While commenting on the offer, Mukesh Ambani, Chairman, IPCL said, "IPCL forms an important part of the Reliance group's overall strategy in petrochemicals. The IPCL issue is a unique public offer and the first of its kind in the Indian capital market history where shares are being offered through a book built mechanism in a listed company."

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