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| World Home » Business » | Fri. May 16, 2008 |
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Reliance Power: bonus shares in ratio of 3:5 MIL/Agencies/indiainfoline, Feb 24, 2008. Mumbai, India: February 124, 2008 – The Board of Directors of the Reliance Power Ltd in their meeting held here today, has approved a proposal for issuing free bonus shares to all categories of shareholders, in the ratio of 3 shares for every 5 shares held. The proposal has excluded the promoter group (comprising of Reliance Energy Ltd. and the ADA Group), They have informed the stock exchanges accordingly. The proposed bonus offering is, however, likely to result in reduction of the cost of Reliance Power shares below the IPO price as follows: Rs269 per share for retail investors, 40% lower than the IPO price of Rs430. Rs281 per share for other investors, 37% lower than the IPO price of Rs450. In a related development, Anil D. Ambani, In a related deveIlopment, Anil D. Ambani, Chairman, Reliance ADA Group, today simultaneously announced a voluntary contribution of 2.6% of his shareholding in Reliance Power to Reliance Energy Ltd., to protect the company from any dilution of its existing 45% stake in Reliance Power, as a result of the bonus proposal. Existing Proposed: Anil D. Ambani 45% 40% The reduction of Ambani’s shareholding in Reliance Power by 5% from 45% to 40%, represents a contribution of nearly Rs50bn (US$1.2bn) by him, in favor of nearly 6 million investors in Reliance Energy and Reliance Power. Commenting on the move, Ambani said, “I have been personally concerned by the notional losses arising to millions of long term investors in Reliance Power, as a result of a dramatic adverse change in sentiment in global and domestic capital markets, subsequent to the pricing of our IPO. Though equity shares are by their very nature risk-bearing instruments, nevertheless, we have taken these one-time and unprecedented measures today, in demonstration of our philosophy of endeavoring to protect and enhance value for all our long-term shareholders.” Based on the proposal for issuance of bonus shares, the paid up share capital of the company will stand increased to 239.7 crore equity shares of Rs10 each. Reliance Power’s IPO closed on January 18, 2008, receiving an overwhelming and record breaking response, with commitments of nearly Rs7500bn (US$190bn), from nearly 500 institutional investors across the globe, and 5 million retail investors. More:
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