Tuesday, June 28 2005 20:28 Hrs (IST) - World Time -

Mumbai: In a quick follow up to the settlement reached between Ambani brothers, Reliance Industries today (Jun 28, 2005) unveiled a series of steps towards carving up of the Rs 100,000 crore business empire.

The board of RIL, headed by elder brother Mukesh, today decided to convert its Rs 8,100 crore investment as preferential shares of Reliance Infocomm into fully paid-up equity shares for a value of Rs 9,208.27 crore, a move that would increase the flagship company's holding to 65.9 per cent in the telecom venture, which has gone to younger sibling Anil.

Sources said that the converted value also includes the interest for two years on investment made by RIL in Infocomm and would substantially boost the value for RIL shareholders.

Earlier, RIL informed the stock exchanges that it would buy 6.97 per cent equity of Reliance Energy from its subsidiaries at a rate of Rs 157.74 per share as against the current market price of Rs 625.15 a share.

Emerging from the Board meeting, Y P Trivedi, who is heading the Board Committee on business restructuring of RIL, said, "Everything is being done as expeditiously as possible."

RIL was working expeditiously to finalise modalities for settlement of ownership issues, he said, but did not fix any time frame saying court proceedings take lot of time.

Following the settlement on June 18, RIL Board had decided to de-merge its investments in Reliance Infocomm, Reliance Energy and Reliance Capital and create a separate entity in the shape of a Special Purpose Vehicle (SPV).

The conversion of preferential shares at the face value of Re 1 would be at a price of Rs 32 per equity share, RIL said in a statement, adding that it had an investment of Rs 8,100 crore represented by 162 crore preferential shares in Reliance Infocomm.

At the height of the fight between the two brothers, Anil had raised the issue of RIL investment of Rs 8,100 crore as preferential equity and suggested its conversion into paid-up equity shares at fair and attractive terms to benefit the shareholders.

Prior to the conversion, RIL's equity in Infocomm was about 42 per cent and Ambani family's equity was 58 per cent. Consequent to Board's decision today, RIL's holding in Infocomm would go up to 65.9 per cent while the family's stake would come down to 34.1 per cent besides giving a financial leveraging option to Infocomm which still needs huge investment to complete its rollout plan.

Ever since the settlement was announced, share prices of all the Reliance group companies belonging to both Mukesh and Anil appreciated significantly and the same was attributed by many as one of the important factor for the recent bull run in the stock market, which saw the BSE index crossing 7200 mark.