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RIL to issue warrants to promoters

Special Correspondent

MUMBAI: The board of directors of Reliance Industries Ltd (RIL) on Saturday approved the issue of 12-crore preferential warrants to promoters to raise funds for its capital expenditure programme. At the current market price of RIL at around Rs. 1,400 per share, the total funds raised through warrants will be Rs. 16,800 crore.

The board also approved a $3-billion cracker project in Jamnagar to set up one of the largest integrated two million tonne petrochemical complexes, which will be completed by 2010-11.

"The board's approval to enhance the equity capital of the company by preferential issue of warrants to promoters demonstrates our commitment to value creation at Reliance,'' Mukesh Ambani, Chairman, RIL, said. The substantial enhancement of shareholders' funds would take RIL to a higher growth platform by strengthening its capital structure, he said.

The board approved the proposal to raise further equity by way of preferential issue of 12 crore warrants exercisable into equal number of equity shares of Rs. 10 each of the company to the promoters as per SEBI guidelines for Preferential Issues, subject to shareholders approval.

"An amount equivalent to 10 per cent of the price will be paid on allotment of warrants and the remaining 90 per cent will be paid at the time of subscription to equity shares on exercise of rights attached to the warrants within 18 months. On exercise of such rights the paid-up capital of the company will increase from Rs. 1,393 crore to Rs. 1,513 crore,'' the company said in a release.

The board also confirmed the decision taken on November 9, 2006 to raise $2 billion to finance the capital expenditure plan for the oil and gas business through external commercial borrowings.

It also has decided to build the largest integrated cracker and petrochemicals complex in the Special Economic Zone (SEZ) in Jamnagar. The board also appointed R. A. Mashelkar as an independent director.

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