After receiving a strong response for its offer for sale (OFS), Anil Ambani-led Reliance Capital has exercised the “Green-Shoe” option to sell further stake in Reliance Nippon. The firm seeks to sell over 8% of its shareholding in RNAM through this OFS aggregating to Rs 1,100 crore. Earlier, Reliance Capital had announced an Offer for Sale (OFS) of its shareholding in RNAM in order to comply with the mandatory requirement of achieving Minimum Public Shareholding of 25% by reducing the promoter stake. The entire RNAM stake monetization proceeds of Rs 6,000 crore (~ US $ 860 million) to be received from the Offer for Sale and the already announced transaction with Nippon Life Insurance Company of Japan will be utilised to reduce Reliance Capital’s outstanding debt, Reliance Capital said in a statement to the exchanges.
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After the OFS green-shoe option and other asset monetisation, Reliance Capital expects to reduce its debt by at least Rs. 12,000 crore (US$ 1.7 billion), or 70%, in the current financial year, as per the firm’s statement. Last week, Reliance Capital had announced an OFS as part of an agreement between Reliance Capital and Japan’s Nippon Life, under which the Anil Ambani-led firm will sell its entire shareholding in Reliance MF, and exit the mutual fund business.
Further, Japan-based Nippon Life has also made an open offer to the public shareholders of RNAM at Rs 230 per share, as required under SEBI regulations to reach the maximum permissible promoter shareholding of 75% for listed companies. After the open offer, the firm will buy the remaining from Reliance Capital, as part of an agreement inked between the two joint venture partners, as per last week’s announcement. Reliance Capital held about 42.88% stake in Reliance Nippon Asset management, prior to the announcement of exiting the business entirely.