Divestment to foreign investors -- Reliance to offload 13 pc stake in RPL

	Financial Daily from THE HINDU group of publications Wednesday, March 21, 2001

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Divestment to foreign investors -- Reliance to offload 13 pc stake in RPL

Our Bureau

MUMBAI, March 20

RELIANCE Industries Ltd (RIL) today announced its decision to divest up to 13 per cent of its stake in Reliance Petroleum Ltd (RPL) to international investors.

As per the current market price, sales can yield RIL around Rs 3,400 crore.

RIL currently holds around 64 per cent equity share capital of Reliance Petroleum. After the sale, RIL will continue to hold 51 per cent controlling stake.

The RPL has informed the stock exchange that its

board today passed a resolution to sponsor depository receipt programme enabling shareholders to partially divest their equity to international investors in the form of depository receipts or other financial instruments.

The divestment to ``foreign strategic/financial investors'' will be completed ``at an appropriate time'' in one or more tranches, a company source said.

The decision follows the Budget proposal allowing companies to transfer or issue securities to investors outside India through GDR/ADR issues.

RIL will be selling 67.62 crore equity shares of RPL representing 13 per cent of its equity capital of Rs 5,202 crore.

RPL's current market capitalisation stands at Rs 27,000 crore.

As per the RPL's current market price of Rs 50.25 per shares, RIL can get Rs 3,397 crore for its 13 per cent stake in RPL. Taking into account the original acquisition cost of Rs 1,300 crore, RIL will have a long-term capital gains of Rs 2,100 crore.

According to an analyst, the divestment of equity in RPL by RIL to international investors was more or less expected after the Budget announcement. This will help RIL to have ready funds to finance the group's oil, gas and infocom ventures.

There were reports that an international oil company would be piking up a stake in RPL. However, the company had denied such reports.

RPL has its 27-million-tonne per annum refinery at Jamnagar in Gujarat.

RIL share closed at Rs 374 on BSE today as against Rs 382.5 on Monday.