Four demergers and a farewell at Reliance

While Mukesh confirmed the demerger plan at RIL’s much-awaited 31st annual general meeting, it was Anil who spelt out the details at a news conference hours after the AGM got over. However, the RIL board is yet to ratify this arrangement.

Anil said a shareholder of RIL who holds, say, 100 shares will get 5 free shares of Reliance Capital Ltd, 7 free shares in Reliance Energy, and 100 free shares in both unlisted Global Fuel Management Services Ltd (GFMS) and Reliance Communications Venture Ltd. RIL has a shareholder base of 23 lakh.

While GFMS will be the holding company of Anil’s power business with contracts for supply of natural gas from RIL, Reliance Communications Ventures Ltd will be holding company for all infocom and telecom companies of the group.

‘‘We are targeting to list both GFMS and RCVL by March 31 2006 so that shareholders get liquidity in new companies,’’ said Anil while ruling out raising any additional funds from the public. With this, Anil Dhirubhai Ambani Enterprises will have four listed companies each with a shareholder base of over 23 lakh with a net worth of Rs 25,000 crore and zero debt.

On the other hand, the Mukesh-controlled Reliance Industries will invest Rs 25,000 crore to double the capacity at its Jamnagar unit, making it the world’s single-largest oil refinery and Rs 17,600 crore for upstream and downstream projects in the petroleum sector.

The capacity expansion would be among the biggest refining expansions worldwide this decade. ‘‘The raising of Jamnagar’s crude throughput to 1.2 million barrels per day (bpd), primarily for exports, would be complete by the second half of the fiscal to March 2009,’’ RIL Chairman Mukesh Ambani announced .

However, Reliance shares fell nearly 3.81 per cent to Rs 713.70, coming off a record intra-day high of 746.90 on Tuesday. Market circles said rumours of a major acquisition fuelled a rally in the stock but fell as the company did not announce any such takeover.

Earlier, Anil made an emotional exit from the company as he sat in the second row with rest of the shareholders. Anil sought “guidance and advise” from elder brother Mukesh for his new corporate entity, a calm Mukesh thanked Anil for his contribution to RIL, and shareholders gave a standing ovation.

Anil also asked shareholders to give a standing ovation to Kokilaben Ambani, who played an important role in dividing Reliance between the two brothers.

‘‘True creator of Reliance is only Dhirubhai Ambani. I will not see anybody like him. For me, RIL has been everything for the last 25 years. It was the centre of my universe, cradle of my corporate life and nursery of my learning,’’ said Anil at the AGM as the first speaker.

Welcoming all shareholders to ADA Enterprises, Anil promised to follow his father’s legacy to give utmost value for shareholders and creating a strong Indian enterprise.

Mukesh said RIL has made 10 more oil and gas discoveries, including six at the Krishna-Godavari basin (KG) and one at onshore block in Yemen.

Mukesh said Reliance would increase its polyester manufacturing capacity by 5.5 lakh tonnes per year in the current financial year. This would take RIL’s total polyester capacity to two million tonnes per year. It has also planned new purified teripthalic acid (PTA) plant at Hazira in Gujarat with a capacity of 6.3 lakh per annum, taking total PTA capacity to 1.9 million tonnes.

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