The Hindu : Business : RCL , RCVL merger at 5:100

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Tuesday, Jan 03, 2006

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Business

RCL , RCVL merger at 5:100

Staff Correspondent

Reliance shareholders stand to benefit

MUMBAI: The board of directors of Reliance Capital Ltd. (RCL) on Monday considered and approved a proposal for the amalgamation of Reliance Capital Ventures Ltd. (RCVL) with the company.

The proposed scheme of amalgamation envisages a share exchange ratio of five equity shares of the face value of Rs. 10 each of the company for every 100 equity shares of the face value of Rs. 10 each of RCVL (after the allotment of shares pursuant to the demerger of RIL). The share exchange ratio is based on the number of shares of RCL held by RCVL and is as recommended by the leading international firm KPMG.

The shares of RCL held by RCVL will be cancelled under the proposed scheme of amalgamation. The fully diluted equity capital of RCL will remain at about Rs. 245 crore.

According to the company, the benefits of the proposed scheme are direct shareholding of RCL by 23 lakh Reliance shareholders, leading to enhancement of their value, elimination of dual listing of RCL and RCVL, elimination of potential `holding company' discount through RCVL market price, increased liquidity for all RCL shareholders and wider domestic and international shareholder base for RCL.

The proposed scheme of amalgamation is subject to the approvals of the board of RCVL, the shareholders of the company and RCVL, the stock exchanges and High Court of Gujarat, the High Court at Mumbai and all other requisite permissions, sanctions and approvals.

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