Within 10 days of a settlement between the Ambani brothers, the group has initiated the demerger process to split the Rs 1,00,000-crore empire.Mukesh Ambani-controlled Reliance Industries Ltd — which held a board meeting here today to discuss the modalities of the demerger — has decided to exercise the option to convert the preference shares of Reliance Infocomm Ltd into fully paid-up equity shares (with voting rights) at Rs 32 per share (face value: Re 1).RIL had an investment of Rs 8,100 crore represented by 162 crore preference shares in Infocomm. It will now allot 287.76 crore equity shares of face value of Re 1 each fully paid-up to RIL for a value of Rs 9,208.27 crore, which includes the accrued premium on preference shares.This allotment will increase the holding of RIL in Reliance Infocomm to 65.9 per cent. Though the group did not announce further details, this RIL stake is expected to go to the new holding company of Anil Ambani.Anil has already taken over as Infocomm chairman but it’s not clear whether the company will go for an IPO to avoid capital gains tax as the company is not listed on exchanges.At the same time, RIL also decided to buy a 6.97 per cent equity in Reliance Energy from its own subsidiary as part of the family settlement.RIL informed the stock exchanges that it, along with Reliance Power Ventures Ltd and Reliance Capital Ltd, has proposed to acquire 1.36 crore shares from Reliance Industrial Investments and Holdings, its wholly-owned subsidiary.The proposed acquisition price is Rs 157.74 per share and the combined equity share of RIL, along with Reliance Capital, would now be 52.64 per cent of REL’s share capital. This stake is expected to go to Anil Ambani’s new holding company.The date of the proposed acquisition is on or before June 30, 2005, and the mode is inter-se transfer amongst promoters under regulation 3(1)(E) of Sebi (substantial acquisition of share and takeovers) regulations, 1999. Hence, it will not attract the provisions of the takeover code.Y.P. Trivedi, an independent director on the board of Reliance, said they are working on the details of the demerger as quickly as possible. ‘‘Everything is being done as expeditiously as possible,’’ Trivedi said soon after the RIL’s board meeting ended today.The restructuring process would take about 10-12 months and the move to buy out shares in the group company REL is a step in that direction. Demerger of the flagship RIL is expected to take about three months to a year as several legal requirements are to be met.
