RIL-RPL MEGA merger;Swap-ratio at 1:16; RIL to become worlds 13th largest refiner

RIL to become world's 13th largest refiner
Board approves RIL-RPL merger; swap-ratio at 1:16

MUMBAI: The Board of Directors of Reliance Industries has approved a scheme of amalgamation of its subsidiary Reliance Petroleum with the parent company under the provisions of Sections 391 to 394 of the Companies Act, 1956. The scheme will be subject to necessary approvals of shareholders and creditors and sanctions of the High Court of Judicature at Bombay and the High Court of Gujarat at Ahmedabad. The Board of Directors amalgamation is effective from April 01, 2008. Upon completion of the amalgamation, shareholders of RPL will receive 1 fully paid equity share of Rs 10 each of the company for every 16 fully paid equity shares
of Rs 10 each of RPL held by them on the record date to be fixed by the transferee company. On Friday, shares of Reliance Industries closed at Rs 1,265.05, down 1.97 per cent on the BSE and RPL settled at Rs 76.20, 1.23 per cent in the red. Key Points
▪ RIL-RPL Merger: Swap ratio at 1:16
▪ Mukesh Ambani: Merger follows enduring philosophy of creating shareholder value.
▪ Equity capacity of RIL to go up to Rs 1643 cr
▪ Merger will result in the world's largest refining capacity at any single location
▪ RIL will become world's 5th largest polypropelyne manufacturer
▪ Promoter holding in RIL will come down to 47% from 49%
▪ RPL shareholders to get 1 RIL share for every 16 held
▪ RIL to extinguish Treasury Stock, merger to be effective from April 1 2008
▪ RIL to issue 6.92 cr shares to RPL shareholders
▪ Merger to give no tax relief for RIL
▪ Merger to be EPS positive.
▪ Valuation advisor to merger were Ernst & Young and Morgan Stanley and tax advisor for merger is PwC
▪ RIL to issue 6.92 cr shares to RPL shareholder
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Reliance Industries will displace US energy major Chevron Corp to become the 13th largest oil refining company in the world after its
board approved plans to absorb its Reliance Petroleum unit. RIL, the nation's largest listed firm, will issue one share for every 16 held in RPL, giving it direct control of the world's largest refinery complex. The company's 33 million tons only-for-export refinery at Jamnagar together with adjacent 29 million tons SEZ refinery of RPL would make it the largest refining company in India. It displaced state-owned Indian Oil Corp (IOC) with 50.7 million tons refining capacity. IOC was ranked 18th on the world list. The 1.24 million barrels per day refining capacity made the port city of Jamnagar in Gujarat the single largest refining hub in the world. In the list of world's largest refining companies, RIL would replace Chevron to become the 13th largest firm. Chevron has refining capacity of just over 61 million tons. The list is lead by Exxon Mobil with a massive 268 million tons of refining capacity followed by Sinopec of China with 210 million tons of refining capacity. PetroChina with 130 million tons a year capacity is at 7th position. Prior to the merger, RIL will also buyout Chevron's five per cent holding in RPL at Rs 60 a share. Chevron had invested in RPL in April 2006 to have a refining base in South Asia. Before the merger, RIL did not find a mention in the list of the world's top 25 companies by refining capacity. IOC was the only Indian firm in the list and after the entry of RIL, the state-run company would drop one position to the 19th. Iranian national oil firm National Iranian Oil Company is a step ahead of RIL on the world list with 83 million tons a year refining capacity. Royal Dutch Shell (199.25 million tons) is ranked third in the world, followed by BP (161.6 million tons) and ConocoPhilips (140 million tons). Saudi Aramco of Saudi Arabia is ranked at 9th position with just over 100 million tons a year of refining capacity. Total of France is at 10th position with 85.3 million tons capacity. RPL commissioned the world-class refinery in the Special Economic Zone (SEZ) in late December and is targeting markets in the US and North America besides western Europe for the Euro-IV and V grade gasoline and diesel it would produce. The merged company would benefit from lower operating costs, Reliance said.

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RIL-RPL merger to create largest refining capacity
RIL-RPL merger to create largest refining capacity: Ambani
Reliance says amalgamation to be tax neutral
Board approves RIL-RPL merger; swap-ratio at 1:16
RIL will issue one share for every 16 held in RPL, giving it direct control of the world's largest refinery complex. Why RIL wants to merge RPL I How investors can benefit

RIL-RPL merger approved; swap-ratio at 16:1
RIL-RPL merged: Swap ratio fixed at 1:16
11:41 - Highlights of RIL-RPL merger
RIL Sees Synergy SP Tulsian View
RIL-RPL swap ratio evokes mixed response from market
Reliance announces share swap ratio of 16:1

Source:ET,MC,Rediff etc