Chevron's RPL stake worth around Rs1,350 crore
02 Mar 2009
Reliance Industries will pay US energy major Chevron's Rs1,350 crore to acquire its five per cent stake in Reliance Petroleum as part of the merger of the two companies.
''The shares will be bought at Rs60 a share, as per the agreement," RIL's cheif financial officer Alok agarwal said.
Chevron, under an earlier crude supply and product offtake agreement, had bought 225 million shares in RPL. As per the agreement, Chevron was to purchase an additional 24 per cent stake in RPL from RIL on conclusion of the agreement.
The agreement also provided for buy-back of the Chevron stake in case these agreements are not executed.
"We are going to exercise that right to buy the shares," Agarwal said, added that RIL would continue to have an on-going business relation with Chevron.
The boards of directors of Reliance Industries Limited (RIL) and Reliance Petroleum Limited (RPL) had unanimously approved RPL's merger with RIL, subject to necessary approvals. The exchange ratio recommended by both boards is 1 (one) share of RIL for every 16 (sixteen) shares of RPL.
RIL will issue 6.92 crore new shares, thereby increasing its equity capital to Rs 1,643 crore.
The merger will unlock significant operational and financial synergies that exist between RIL and RPL and enhance value for shareholders of both companies, chairman Mukesh Ambani said.