RIL promoters to invest Rs 15,000 cr

Mumbai, Feb 24 (UNI) Promoters of Mukesh Ambani-led Reliance Industries will invest nearly Rs 15,000 crore in the country's largest private sector company to raise their stake to 54.53 per cent in what analysts believe is aimed at taking the promoters' holding in RIL beyond the reach of hostile takeover attempts.

The RIL Board, which met here today, decided to issue 12 crore preferential warrants convertible into equal number of equity shares to the promoters who will increase their shareholding from 50.62 per cent to 54.53 per cent.

The Securities and Exchange Board of India's norms require a preferential issue to be priced at or over the last six months' average stock price which in the case of RIL averages at about Rs 1250 per share. At this rate, 12 crore shares to promotors translate into equity infusion of Rs 15,000 crore in the company. An RIL release, however, did not mention the price of the warrants.

SEBI has allowed a maximum increase of 5 per cent in promoters' holdings in one year either through preferential allotment of shares or creeping acquisitions.

Market watchers said the promoters have been raising their stake in RIL since the group's businesses were split between Mukesh and his younger brother Anil Ambani in June, 2005. Their stake has gone up by 4 per cent since then.

The preferential issue of 12 crore will increase the paid-up capital of RIL to Rs 1513 crore from Rs 1393 crore, the release said.

An amount equivalent to 10 per cent of the price will be paid on allotment of warrants and the remaining 90 per cent at the time of subscription of equity shares within a period of 18 months, the release added.

'' 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,'' RIL chairman Mukesh Ambani said. The substantial enhancement of shareholders funds will take RIL to a higher growth platform by strengthening its capital structure, he added.

The RIL Board also decided to raise two billion dollars in debt through external commercial borrowings for funding oil and gas business. Besides, the company is setting up a three billion dollars integrated cracker and petrochemical complex of two mmpta capacity at Jamnagar SEZ. The naphtha cracker project, which will use refinery off gases and other byproducts as feed stock to manufacture ethylene, proplyne and its downstream commodity and speciality derivatives, will be operational by 2010-11.

'' I am really excited about accelerating our investments in all our key businesses - oil&gas, refining, petrochemicals and retailing by both organic and inorganic growth initiatives,'' Mukesh Ambani said.

The RIL board appointed former chief of Council of Scientific and Industrial Research (CSIR) R A Mashelkar as an indepnedent director on its board.

UNI