RIL holds EGM to vote on the merger of RPL with itself

RELIANCE Industries Limited (RIL) convened an extraordinary general meeting (EGM) on Saturday for its shareholders to vote on the merger of Reliance Petroleum Limited (RPL) with itself. The result of this voting, according to the RIL spokesperson, will be announced on Monday. After the meeting of the equity shareholders, the creditors - secured and unsecured — also met to vote on the merger. It is expected that the RIL shareholders will favour the company’s merger plan.
    On April 9, the equity shareholders of RPL apart from its secured and unsecured creditors will meet at Jamnagar on the same issue. The EGM was chaired by Justice Srikrishna and attended by some RIL board members including Nikhil Meswani and Y P Trivedi. The EGM lasted for about 45 minutes. The boards of both the companies — RIL and RPL — had met on March 2 and announced a merger ratio of 1:16 — one share of RIL for every 16 shares held in RPL. RIL holds nearly 75% stake in RPL. RIL went public in 2006.
    It is expected that the merged entity will have 3.7 million shareholders. RPL has a 100% EOU refinery at Jamnagar with a capacity of 29 million tonnes per annum. With RIL’s capacity of 33 million tonnes, the merged entity will have a total capacity of 62 million tonnes per annum (1.24 million barrels per day) making it the largest refining capacity at any single location in the world. In an earlier press statement, RIL said the merger will provide synergy with respect to crude procurement and product placement.
    In line with the merger proposal, RIL will issue 6.92 crore new equity shares to the existing shareholders of RPL. As a result, this will increase RIL’s equity base by 4.4% from Rs 1,574 crore to Rs 1,643 crore. The effective promoter shareholding in RIL, post the merger, will fall from 55% to 52.7%.