Reliance Capital shareholders for RCVL merger

Mumbai, Apr 25: Reliance Capital (RCL) shareholders have unanimously approved the merger of Reliance Capital Ventures Ltd (RCVL) with the company.

The shareholders of RCVL will meet tomorrow to consider the proposed merger.

RCL informed the Bombay Stock Exchange today that the meeting of its shareholders to this effect was held as per a High Court directive.

The proposed merger 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 the company.

The share exchange ratio is based on the number of shares of the company held by RCVL, and is as recommended by international firm KPMG.

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

RCVL sources said the proposed scheme would allow its shareholders to have direct shareholding of Reliance Capital, leading to 23 lakh shareholders, which will enhance the share value.

Besides elimination of dual-listing of RCL and RCVL, the merger would also eliminate the potential for ''holding company'' discount through RCVL market price. The merged entity would have increased liquidity for all Reliance Capital shareholders and also a wider domestic and international shareholder base for the company.

UNI