The Bombay High Court on Monday sanctioned the merger of Reliance Industries Ltd (RIL) and Reliance Petroleum (RPL), but stayed its own order to enable those who are against the merger to file an appeal.
Anup Sheth and two others had filed applications, objecting to the merger scheme in its present form. Justice AM Khanwilkar has sanctioned the merger, but stayed the order for four weeks, so that Sheth and others could file an appeal before a division bench. The objectors had demanded that High Court should order an inquiry by the Securities and Exchange Board of India, the Reserve Bank India and other financial governing bodies before sanctioning the merger.
The petitioners had said that the valuation of shares for arriving at the exchange ratio (for the purpose of merger) was not fair and correct, as several financial aspects were not taken into consideration. The valuation also overlooked several facts and circumstances and assets and liabilities, they had contended. But the High Court, however, dismissed these objections, and approved the merger.
On March 1 this year, RIL?s board had finalised the merger with RPL. As per the terms of the merger, RPL shareholders would get one RIL share for every 16 shares held. The merger ratio was slightly in favour of RPL, marketmen had said. RIL was to issue 6.92 crore shares to RPL shareholders following the merger.
The merger of Reliance?s refinery subsidiary (RPL) with itself makes the company one of the world?s largest refiners and the combined crude oil processing capacity will be 1.24 million barrels per day, RIL had said in a press statement. The merger also led to RIL acquiring the 5% stake that US oil major Chevron had held in RPL. Before the merger, RIL held a 70.38% stake in RPL, which it increased it to 75.38% after buying the Chevron stake.
However, in a convened meeting of equity shareholders, secured creditors and unsecured creditors of RIL held on April 4, 98.86% of the shareholders present in person/proxies, representing 99.9998% of the total value of the equity shares held by them, voted in favour of the scheme of amalgamation, Shareholders representing 0.0002% of the total value of shares voted against the scheme.