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Ambani brothers reconciliation bid props up shares

May 24, 2010 By vani Leave a Comment

Shares in firms controlled by billionaire Ambani brothers rallied on Monday after the brothers ended a non-compete agreement, taking a step towards reconciliation in their long-running feud.

The brothers will now be free to compete on each other’s turf, with the exception of gas-fired power plants, removing a source of friction between the two conglomerates — Reliance Industries (RIL) and Anil Dhirubhai Ambani Group (ADAG).

“We believe the new agreement is positive for RIL, as it opens up opportunities for growth in new sectors within India,” Goldman sachs analysts wrote in a note.

“But, given the competitive landscape in telecom, financial services etc., any potential entry by RIL could be in the form of co-operation with ADAG or via industry consolidation, in our view,” they wrote.

Shares in energy major Reliance Industries, India’s most valuable firm at $73 billion and controlled by elder sibling Mukesh Ambani, were up 3.5 percent at 1,030.90 rupees by 0415 GMT after rising as much as 5.3 percent in early deals.

Anil Ambani-controlled Reliance Communications, India’s No. 2 mobile phone operator, rose 6.1 percent to 141.50 rupees, while Reliance Natural Resources jumped 20 percent.

Reliance Natural had a gas dispute with Reliance Industries and India’s highest court on May 7 ordered the brothers to renegotiate within six weeks a private natural gas supply contract between the two companies.

The two brothers are estimated to be worth a combined $43 billion and both live in Mumbai but had not been on speaking terms during their dispute.

They split the business empire inherited from their father Dhirubhai Ambani in a 2005 deal brokered by their homemaker mother, Kokilaben.

As part of their agreements announced on Sunday, Reliance Industries will not enter the gas-based electricity generation business before April 1, 2022, with an exception made for its captive gas-based power plants, the groups said.

Shares in financial services firm Reliance Capital, controlled by Anil Ambani were up 5.5 percent at 676.80 rupees.

($1=46.6 rupees)

(Reporting by Devidutta Tripathy; Editing by Ranjit Gangadharan)

(For more business news on Reuters Money visit http://www.reutersmoney.in)

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Ambanis end non-compete pact in reconciliation bid

May 24, 2010 By vani Leave a Comment

India’s billionaire Ambani brothers took a step towards reconciliation of their long-running feud on Sunday, ending non-compete agreements in a step they hoped would lead to cooperation between the two groups.

Both groups said they hoped to reach a conclusion soon in a gas supply agreement between Reliance Industries (RIL) and Anil’s Reliance Natural Resources that had been at the heart of their dispute.

“RIL and Reliance ADA Group are hopeful and confident that all these steps will create an overall environment of harmony, co-operation and collaboration between the two groups, thereby further enhancing overall shareholder value for shareholders of both groups,” both companies said in statements.

The announcement comes weeks after the Supreme Court ruled in Mukesh Ambani’s favour in a bitter dispute over gas pricing that had made headlines, riven India’s richest family and raised questions about the influence of big business on government policy.

On Sunday, Reliance Industries and Anil’s Reliance ADA Group said they had agreed to cancel all existing non-compete pacts which the groups had signed in 2006 and entered into a new and simpler non-compete pact only for gas-based power generation.

“If you weigh the positives and negatives, this is more positive for Reliance Industries than R-ADAG group, because this gives Reliance an opportunity to look into expansion in other areas, which they were not allowed to do earlier,” said S.P. Tulsian, an independent investment consultant.

“You can’t rule out the possibility of Reliance entering in sectors such as telecom,” adding the Reliance shares are expected to open up on Monday, in the wake of this development.

The two brothers, who both live in Mumbai but had not been on speaking terms during their dispute, inherited their business empires from their father Dhirubhai Ambani in 2005.

Mukesh got the jewel – Reliance Industries, which has interests in oil and gas exploration, petrochemicals, infrastructure and textiles. Anil got the telecoms, power and financial services businesses.

(Reporting by Devidutta Tripathy; additional reporting by Ketan Bondre; writing by Tony Munroe; editing by Surojit Gupta)

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Gas dispute: ‘We will respect Supreme Court order’: Anil Ambani

May 7, 2010 By vani Leave a Comment

New Delhi, May 7 (ANI): Reliance Natural Resources Limited (RNRL) chief Anil Ambani onm Friday said he will not challenge the Supreme Court verdict delivered on Friday that gave his brother, Mukesh’s Reliance Industries Limited (RIL), the advantage in the Krishna Godavari Basin Gas row.

””We respect the judgment of the Supreme; we note that SC has safeguarded interest of over 25 lakh RNRL shareholders by giving guidelines for gas supply agreement,” Anil said.

“We have no plan to file a review petition in the Supreme Court… We are looking forward to successful renegotiation with RIL (Reliance Industries) within six weeks in line with verdict,” he added.

The Supreme Court has said the RIL cannot supply gas to the RNRL and its power plants at 234 dollars per unit which is what the brothers had agreed to in a private agreement in 2005.

The RIL has since challenged the price, arguing that it should be allowed to charge more, because the government has asked for higher prices.

The court held that gas belongs entirely to the government and it alone has the right to decide gas prices.

The court ordered Mukesh and Anil to renegotiate their contract in six weeks.

Anil maintained that he was rather looking forward to successful re-negotiation with RIL over the next 6 weeks as directed by the SC.

Aiming to arrest the fall of the ADAG stocks in the market, Anil maintained that the Court had safeguarded the interest of 2.5 million RNRL shareholders.

The stock is trading down by 20 percent ever since the verdict came in. (ANI)

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Deora says Govt tried but failed to get Ambani brothers reconcile

September 2, 2009 By admin Leave a Comment

Moscow, Sep. 2 (ANI): Union Petroleum Minister Murli Deora on Wednesday said that the government tried to pacify the fighting Ambani brothers several times, but failed to bring about a reconciliation.

“We tried to bring a reconciliation, but we failed. The government had advised several times that they (Mukesh and Anil Ambani) should stop fighting,” Deora told reporters in Moscow, where he is accompanying President Pratibha Patil.

Last month, the Prime Minister’s Office had issued a similar statement.

“The Prime Minister’s general approach has been that instead of fighting, they (Ambanis) should patch up as both their groups contribute sizeably to India’s economic growth,” PMO has stated.

The two Ambani groups command about 10 per cent of collective market capitalisation of the total over 4,000 companies in the country.

“We wanted to put an end to it (gas dispute) so that the work can go on,” Deora replied after being asked about reasons for the government yesterday amend its petition in Supreme Court on the dispute between RIL and RNRL – the two firms promoted by Mukesh and Anil, respectively.

The government petition said: “It is in no way concerned with the private dispute between RIL and RNRL or between the Ambani brothers, but is only concerned with its rights as owner and regulator of natural gas.”

The original petition had sought “(the MoU) should be declared null and void.”

On the issue of gas allocation, Deora said:”We want a committee rather than the ministry to go into the issue.” (ANI)

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Anil Ambani welcomes government’s fresh plea on gas row dispute with brother Mukesh

September 2, 2009 By admin Leave a Comment

Mumbai, Sep 2 (ANI): Anil Ambani of Reliance Natural Resource Limited (RNRL) welcomed a fresh application filed by central government in the Supreme Court on a row over gas price with estranged elder brother Mukesh Ambani’s Reliance Industries Limited (RIL).

Top Indian conglomerate Reliance Industries, headed by Mukesh Ambani, and Reliance Natural, led by Anil Ambani, have been fighting over terms of a gas-supply agreement struck when the Reliance empire was split in 2005.

The fresh application by the government said that the government’s policies and contracts on production and gas pricing would prevail over any private arrangement.

“Reliance Natural Resource on behalf of its over 26 lakh shareholders is grateful to the Government of India for its neutral stand in proposing these amendments,” Anil Ambani told reporters in Mumbai.

“With the filing of application, the role of government in Reliance Natural Resource-RIL matter remains limited only to interpretation of just two issues. Issue A – the gas utilisation policy and issue B – provisions of the Production Sharing Contract. This is exactly the same scope of intervention that was permitted to the government of India by the Bombay High Court,” he added.

The latest tussle between the feuding brothers, which stems from the 2005 break-up of the Reliance empire built by their father, has raised concerns it could discourage investment in the sector as India scrambles to shore up its energy security.

In July, India’s apex court said it would club all petitions and applications in the case together.

The Indian government had earlier made a petition to intervene in the case, arguing that the gas is ‘state property’ and that the private agreement between the Ambanis over the gas is not valid. (ANI)

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RIL’s Jamnagar refinery to get CISF security cover

August 30, 2009 By admin Leave a Comment

New Delhi, Aug 30 (ANI): Mukesh Ambani led Reliance Industries Ltd (RIL) has decided to get the security cover from the Central Industrial Security Force (CISF) for its Jamnagar refinery in Gujarat.

RIL’s Jamnagar refinery, is world’s biggest Greenfield refinery

According to sources, the RIL has conveyed its decision to the Union Home Ministry that they are now keen to take the CISF security cover. The CISF personnel are likely to be deployed in Jamnagar by September.

Though the Home Ministry has cleared the request of the RIL a couple of months ago, but the RIL has sought time to reconsider its decision, sources added.

The RIL is the second private company to get protection from the CISF after the Central Government’s announcement that the central police forces would be available for guarding private installations.

The software major Infosys is the first private company to have a security cover from CISF. The central police force is giving the protection to Infosys head office in Bangalore since July.

The officials of the CISF carried out exhaustive survey of the refinery and decided to provide 100 personnel for it. Besides guarding, the CISF is likely to assist RIL in training the company’s security personnel, sources said. (ANI)

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RIL allots 47,945 shares to employees under ESOS

July 4, 2009 By admin Leave a Comment

MUMBAI: Diversified business conglomerate Reliance Industries Ltd (RIL) has alloted 47,945 equity shares to its employees under Employees StockOption Scheme (ESOS).

The company has allotted 47,945 shares of Rs 10 each to its employees on June 29, RIL said in a filing to the Bombay Stock Exchange.

RIL, the country’s most valued firm, is engaged in polymers, chemicals, fiber intermediates, petroleum, textiles and procurement business.

Earlier on June 10, RIL had alloted 21,173 equity shares of Rs 10 a piece to its employees pursuant to the ESOS.

Shares of RIL were trading at Rs 2,028.10 on the BSE, up 0.89 per cent from previous close

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RNRL – RNRL News – Reliance Natural Resources Ltd – RNRL wins over RIL in Gas Dispute case-Anil Ambani firm wins legal tussle over gas supply

June 16, 2009 By admin Leave a Comment

RNRL – RNRL News – Reliance Natural Resources Ltd – RNRL wins over RIL in Gas Dispute case-Anil Ambani firm wins legal tussle over gas supply

Mumbai, June 15 Anil Ambani’s Reliance Natural Resources Ltd (RNRL) will get assured gas supply of 28 million metric standard cubic metre per day (mmscmd) from the Krishna-Godavari hydrocarbon basin for 17 years, the Bombay High Court ruled Monday. The court also fixed the price at $2.34 per million British thermal unit (mBtu).

A division bench of Justices J.N. Patel and K.K. Tated said the gas would be used only for power generation and not trading.

Directing the Mukesh Ambani-headed Reliance Industries (RIL) to arrive at an arrangement along these lines within a month, the court also said the Ambani brothers may consult their mother if there was any difficulty at arriving at an agreement.

RNRL had approached the court after RIL refused to supply gas at $2.34 per mbtu from the Krishna-Godavari basin.

RNRL had claimed at least half of the 80 million standard cubic metres of gas per day that is envisaged from the fields off the Andhra Pradesh coast – said to be the country’s biggest source of hydrocarbons today.

Last September, RNRL counsel Ram Jethmalani had told the court that Anil Ambani was willing to meet Mukesh Ambani any time to resolve the dispute and that he was open to mediation by their mother Kokilaben Ambani.

Jethmalani had also told the court that the Anil Ambani group’s power plants would come up in three years if it got a bankable agreement of supply from RIL. “Once the plants come up, RNRL will use gas only for power generation,” he had said.

In an interim order last year, the court had restrained RIL from entering into contracts to sell the gas from the basin – known officially as KG-D6 gas – with companies other than RNRL and the state-run National Thermal Power Corp (NTPC).

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RNRL – RNRL News – Reliance Natural Resources Ltd – RNRL wins over RIL in Gas Dispute case

June 16, 2009 By admin Leave a Comment

RNRL (Reliance Natural Resources Ltd) has won over RIL in Gas Dispute case. Bombay High Court today has ruled that RNRL eill get assured Gas supply of 28 mmscmd from RIL for 17 years at 2.34$ .

Gas Supply from Krishna-godavari is to be used for Dadri Power Plant at UP. GSMA came into existence after Demerger of Reliance Group.

In December 2006, RNRL moved the Bombay High Court asking it to compel RIL to honour the gas agreement. Justice Anup Mohta, who heard the case, asked the companies to settle the matter internally under the June 2005 family agreement. The judge also restrained RIL from selling gas to third parties till the final order.

Unable to agree on the price, terms and quantity of gas, both firms approached the division bench of the Bombay High Court against the order of the single bench in early 2008. The hearing of the matter continued till February 2009. Thereafter, the division bench came out with an interim order allowing RIL to sell gas to third parties. The interim verdict also mentioned that RIL’s gas agreement with others would be subject to the court’s final order.

The basic argument in the RIL-RNRL case pertains to the pricing and quantum of gas. During the course of hearing, RNRL made it clear that it wanted 28 million metric standard cubic meters per day of gas for 17 years for $2.34 per mmBtu , while RIL argued that it could not sell gas below the government-approved price of $4.2 per mmBtu.

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RIL gas begins to flow from KG D-6 basin

April 2, 2009 By admin Leave a Comment

New Delhi, Apr 2 (ANI): Reliance India Ltd. (RIL) achieved a landmark in the history of oil and gas production when its deep-sea Krishna Godavari basin fields flowed to the surface on Thursday.

Unlike the practice around the world of a minimum nine years, the RIL just took seven years from the date of discovery to begin gas production from the deep-sea KG-D6 block.

According to Petroleum Secretary R S Pandey, India will save USD nine billion in oil import bill annually with the beginning of production from Reliance Industries’ eastern offshore KG D-6 fields.

He informed that Reliance Industries began gas production on Wednesday, and the output is at 2.5 million cubic metres per day.

“Revenues from KG-D6 gas sales are expected to be USD 42 billion over the life of the field, and the Government’s profit share at a minimum USD 14 billion,” added Pandey.

According to sources, Natural gas production from wells started at 5 p.m. on Wednesday and it reached the onland receiving facility at Gadimoga in Kakinada district of Andhra Pradesh this morning.

The first fifteen fertilizer plants, that will get all of the initial output, is likely to get the gas within the next 3-4 days.

The most distant plant is expected to get the gas in about 15 days. (ANI)

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IOC seeks 50:50 partnership in RIL’s petrol pumps

March 23, 2009 By admin Leave a Comment

State-run Indian Oil Corporation (IOC) has proposed a 50:50 partnership to operate 1432 closed petrol pumps of Reliance Industries (RIL), having 15 per cent fuel market share by the closing date of March 2008.

Other firms including Royal Dutch Shell, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have also shown interest in partnership with Reliance.

The private firm suffered huge losses in early 2008 due to difference in retail price of petrol and diesel sold by public sector oil companies and other private firms leading to closure of RIL’s petrol pumps.

Meanwhile, a senior official of IOC said, “We would not like to comment.” He, however, said that company has already got approval from its board and final decision would be taken after weighing all pro and cons.

RIL will set up a data room to access financial proposals of interested parties and final decision would be taken by firm’s chairman, Mukesh Ambani.

Sources informed that IOC, having 17600 petrol pumps, wants equal partnership as it is not interested in portfolio investment while RIL wants 26, 50 and 74 per cent equity stake from retailers in the proposed joint venture.

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Reliance Industries agrees on merger with RPL, swap ratio at 16-1

March 3, 2009 By admin Leave a Comment

Mumbai, Mar 2 (ANI): The board of directors of Reliance Industries headed by Mukesh Ambani on Monday agreed to merge with its refinery subsidiary, the Reliance Petroleum Ltd. (RPL).

Both the companies, in their respective filings, agreed on one equity share for the RPL shareholders and 16 for the RIL shareholders.

This development has resulted in formation of one of the largest refineries in the world.

The merger, which would take effect from April 1, 2009, would also make the RIL one of the top 50 companies in the world on profitability basis.

The RIL had earlier announced to buy five per cent stake in Chevron Energy after the latter decided to quit the RPL.

The RIL had bought 22.50 crore equity shares, which was five percent of RPL’s equity from Chevron. This would raise its stake in the company to 75.38 percent. (ANI)

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