Saturday, August 6 2005 10:25 Hrs (IST) - World Time -

Mumbai: In a big bonanza to its 23-lakh shareholders, Reliance Industries Board yesterday (Aug 5, 2005) approved a de-merger scheme and announced creation of four separate companies, slated to go to Anil Ambani, in which existing Reliance Industries Limited (RIL) shareholders would get equal number of shares.

"All shareholders of RIL, except the specified shareholders, would be issued shares of demerged undertakings in 1:1 ratio," RIL said in a statement after the meeting chaired by Mukesh Ambani.

Within minutes, Anil Ambani welcomed the RIL shareholders into group companies of ADA Enterprises and said "I am happy that the Board of Reliance has accepted my position and the proposed organization of the Reliance group is based on the same philosophy."

All the four entities Reliance Communication Ventures Ltd, Reliance Energy Ventures, Reliance Capital Ventures and Global Fuel Management Services would be listed on the bourses and the scheme would become effective from September 1, RIL said in its statement.

With this, the settlement of ownership of Reliance Empire has been virtually completed with Mukesh getting the flagship company RIL along with International Petrochemical Company Ltd (IPCL) and Anil getting Reliance Infocomm, Reliance Energy and Reliance Capital.

RIL said book value of its investments in three de merged companies Reliance Energy Limited (Rel) Communications Ventures, Rel Energy Ventures and Reliance Capital was about Rs 19,000 crore and added book value of its investment in Global Fuel Management Services was 'not significant'.

Giving details of its holding in each of the proposed entities, RIL said the restructuring would unlock value for all shareholders as they could participate directly in all the businesses that RIL nurtured and brought to stature.

It said "The shareholders of RIL would continue to participate in the growth and progress of RIL which is a global oil, gas, refining and petro chemcials company. They would continue to hold the same number of shares as they currently hold in RIL.

"In addition to that, they would receive separate shares in the four demerged entities, which will allow them to participate individually as well as collectively in the growth areas of telecom, financial services and coal and gas based energy businesses," it said.

The approval comes two days after Mukesh Ambani outlined the demerger scheme

The approval comes two days after Mukesh Ambani outlined the demerger scheme at its AGM and details of restructuring of ADA Enterprises by his younger brother Anil to inform the RIL shareholders as to what would be their take in his group companies.

RIL had appointed CRISIL, JM Morgan Stanley, Deloitte Haskins and Sells and Amarachand Mangaldas and Suresh A Shroff and Company to advise the Board Corporate Governance and Restructuring Committee, headed by Y P Trivedi, to work out the demerger details.

Stating that he advocated for reorganization of the Reliance group on the basis of fairness, transparency, the need to unlock value and enhance value for over 23 lakh RIL shareholders, Anil said in a statment that "ADA Enterprises will have four listed companies each with a shareholder base of over 23 lakh."

Based on the demerger scheme, for every 100 shares of RIL a shareholder would get approximately five shares of Reliance Capital, seven shares of Reliance Energy besides 100 shares each in the two new companies Global Fuel Management Services and Reliance Communications Ventures Ltd, ADA Enterprises said in a statement.

"I look forward to building a sustained and mutually rewarding relationship with our enlarged family of investors, amongst the largest shareholding families in the world with a focus on maximization of overall shareholders value," Anil said.