Monday, March 2, 2009

Highlights of RIL-RPL merger

he Board of Directors of Reliance Industries on Monday approved the merger of Reliance Petroleum Ltd with the former. The swap ratio stands at 1:18 and each RPL shareholder stands to get 1 RIL share held.

Here are the highlights of the merger

RPL shareholders to get 1 Share of RIL for every 16 shares held
RIL to cancel holding in RPL
RIL to extinguish 13% treasury stock
Merger effective retrospectively from April 1, 2008
Merger ratio in favour of RPL

Outstanding shares: 157.4 cr shares
Additional Shares to be 6.92 cr shares
New share capital: 164.3 cr shares
Dilution: 4.2% on fully diluted basis
Post merger, RIL promoter holding to come down to 47% from 49%

Management sees merger to be tax neutral
Merger P&L neutral for RIL
Merger will help effective utilization of RPL’s $1.5bn operational cash flow
SEZ benefits to continue for merged entity

FY10E net sales of merged entity seen at Rs 210,000cr
FY10E net profit of merged entity seen at Rs 21,000cr
Earnings increase higher than 4.4% stake dilution in FY10
Merger 3-5% EPS accretive for RIL
FY10E EPS of combined entity at Rs 127-135

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