Reliance Capital Ltd said on Monday its board had approved of a merger with the holding company for the stake in the financial services firm spun off by Reliance Industries Ltd.
Reliance Capital Ventures was created following a settlement of a dispute between the Ambani brothers who run Reliance, India's largest private sector group. The company's shares closed 0.65 percent higher at 441.45 rupees before the news in a flat market.
Under the merger scheme, investors will get five shares of Reliance Capital for every 100 held in Reliance Capital Ventures.
The merger, subject to approvals, would create a base of 2.3 million shareholders and eliminate the listing of the holding company, it added.
The Reliance group's assets would be split with effect from January 18 as result of a corporate restructuring at the core of the settlement between the two brothers.
Anil Ambani will gain control of utility Reliance Energy Ltd, Reliance Capital and the unlisted telecom businesses, in which Reliance Industries holds stakes.
Older brother Mukesh Ambani will run the flagship business, Reliance Industries, which includes oil and gas exploration, refining and petrochemicals.
Shareholders in Reliance Industries will receive one share each in four new companies to be created for every share held.
A special trading session will be held on January 18 where only Reliance Industries shares will be traded to help investors acertain their value after the spin-off.
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