Mumbai: Anil Ambani-led Reliance Power and Reliance Natural Resources Ltd (RNRL) said on Friday that the Bombay High Court has approved the merger of both entities.
According to the scheme of arrangement, Reliance Power (RPower) shall issue and allot one equity share of Rs10 face value for every four equity shares of Rs5 face value of RNRL, the companies said in separate filings to the Bombay Stock Exchange (BSE).
The merger would increase RPower’s shareholders’ base to over 6 million from 3.5 million at present.
Following the arrangement, RPower’s net worth would rise by over Rs16,000 crore, with the contribution of about Rs1,900 crore from RNRL, the filing added.
In addition, RNRL’s gas supply agreement with Reliance Industries will accelerate the implementation of RPower’s plans for setting up over 8,000 MW of gas-based power generation capacity. Furthermore, the power major would be able to utilise gas from RNRL’s coal bed methane projects.
RNRL’s shareholders would also benefit from the substantial coal reserves and growth prospects of RPower’s diversified generation portfolio of 37,000 MW.
Shares of both ADAG firms ended the day in the red amid a weak broader market. Shares of RPower plunged by 1.44 % to settle at Rs160.40, while RNRL closed at Rs39.50, down 1.37 % on the BSE.