New Delhi: Mukesh Ambani and other promoters of Reliance Industries Ltd will invest nearly Rs 17,000 crore in the country's largest private firm to raise their stake to 54.53 per cent, a move that will insulate it from any hostile takeover bid.
The RIL Board, which met in Mumbai on Saturday, 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.
At Friday's closing stock price of Rs 1412.8, 12 crore warrants of Rs 10 each translate into an equity infusion of Rs 16,953.6 crore in the company.
The move, which puts Mukesh Ambani firmly in the saddle, is possibly the single largest equity infusion by promoters in an Indian company.
An RIL release issued after the Board meeting, however, did not say at what price the warrants will be issued.
The 12 crore preferential issue will increase the paid-up capital of the company to Rs 1,513 crore from Rs 1,393 crore.
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 said.
"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 was quoted as saying.
The RIL Board also decided to raise $2 billion in debt through External Commercial Borrowings for funding oil and gas business. Besides, the company is setting up a $3 billion naphtha cracker project in Jamnagar, which will be operational by 2010-11.
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