Monday, January 4, 2010

RIL sells Rs 2,675 cr treasury stocks to LIC

Reliance Industries, which has made a bid to take over petrochemicals firm LyondellBasell, on Monday raised Rs 2,675 crore (around $ 577 million) through a share sale, its second big equity fund raising in less than four months. Life Insurance Corp of India which holds around 6 per cent in Reliance Industries acquired the shares. The fund raising is seen as part of Reliance's plan to create a corpus for the takeover of Luxembourg-based LyondellBasell in a deal that could be worth around $12 billion.

In September 2009, Reliance raised Rs 3,188 crore by selling treasury stock worth 1.5 crore shares at an average price of Rs 2,125 per share (before the bonus issue). With this, RIL has mobilised Rs 5,863 crore that could used to fund the Lyondell takeover. “Petroleum Trust sold approximately 258.50 lakh equity shares of RIL. Reliance Industrial Investments and Holdings Limited, a wholly-owned subsidiary of RIL, is the beneficiary of the Trust,” RIL said in a statement on Monday. RIL shares lost 1.29 per cent to Rs 1,075.35 in a strong market on Monday.

RIL said the Trust will realise approximately Rs 2,675 crore, at an average price of about Rs 1035 per share. The financial impact will be reflected in the consolidated financial statements of the company, it said.

The treasury stock — created as a result of past mergers of subsidiaries with the parent company — was held by Petroleum Trust and nominally recorded as promoters’ stake, but the stock cannot be voted as per the rules. Petroleum Trust held a 6.65 per cent stake in the company — or 10.46 crore shares — prior to the two stock sales.

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