Reliance Inf S Regulatory News (RIFS)

3 Dec 2007 11:45

Reliance Energy Ld03 December 2007 December 2, 2007 The London Stock ExchangeCompany Announcement OfficeLondon EC2N 1HPUnited Kingdom Dear Sirs, Sub: Outcome of the Board Meeting of Reliance Energy Limited (REL) held today December 2, 2007 At the meeting held today, the Board of Directors of the Company have approvedthe proposal for new equity capital infusion of up to Rs. 8,000 crore to theCompany. We enclose the copy of the Media Release which sets forth the details of theproposal. It is proposed to seek the necessary approval of shareholders through PostalBallot. We request you to inform your members accordingly. Yours faithfullyFor Reliance Energy Limited Ramesh ShenoyCompany Secretary Encl : Media Release MEDIA RELEASE RELIANCE ENERGY TO SUBSTANTIALLY ENHANCE NET WORTH AND BORROWING CAPABILITIES TO PURSUE MEGA OPPORTUNITIES RELIANCE ANIL DHIRUBHAI AMBANI GROUP TO INFUSE NEW EQUITY CAPITAL OF UP TO RS. 8,000 CRORE NEW EQUITY CAPITAL INFUSION AT A PRICE OF RS. 1,812 PER SHARE - A PREMIUM OF 5% TO MARKET PRICE AND SEBI FORMULA CAPITAL INFUSION AT SUBSTANTIAL PREMIUM REFLECTS STRONG VOTE OF CONFIDENCE IN FUTURE GROWTH PROSPECTS Mumbai, December 2, 2007 : At a meeting held today, the Board of Directors ofReliance Energy Limited (REL) have approved a proposal for new equity capitalinfusion of up to Rs. 8,000 crore into the Company. The Reliance Energy group is engaged in several mega projects underimplementation and under consideration, in power generation, transmission, anddistribution, as well as infrastructure development in areas such as highways,bridges, metro rail, real estate, etc. A large number of new mega infrastructure projects are also soon being put tobid, to provide further impetus to the country's rapidly accelerating economicgrowth. The new equity capital will substantially enhance Reliance Energy's net worth,and further augment its borrowing capabilities, to enable greater participationin these mega growth opportunities in high growth areas, thereby generatingsuperior returns for over 1.5 million shareholders. The new equity capital infusion is proposed through a preferential offer ofequity shares and/or equity related securities to Reliance Anil Dhirubhai AmbaniGroup. Life Insurance Corporation, New India Assurance, Oriental Insurance,General Insurance, National Insurance and United India Insurance, which havebeen long-term shareholders of the Company over the past several decades and whocollectively hold approx. 18% of equity, will be provided an opportunity toparticipate in the proposed offering, on the same terms and conditions. The preferential offer, which is subject to necessary approvals fromshareholders, will be made at a price of Rs. 1,812 per share, representing arecord premium of 5% to the current market price, and the minimum price as perapplicable SEBI Guidelines. Commenting on the development, Shri Anil Dhirubhai Ambani, Chairman, RelianceEnergy Ltd., said: "We have a great sense of excitement at the unprecedented opportunitiesunfolding before the Reliance Energy group, in the high growth areas of powerand infrastructure development. The new equity infusion of capital of up to Rs. 8,000 crore will propel RelianceEnergy into a completely new orbit, facilitating our participation in a largenumber of forthcoming mega projects, for the benefit of our over 1.5 millionshareholders. We believe our committed infusion of new equity capital at a premium of 5% tothe current market price, and the minimum SEBI formula determined price: • sets a new trend in corporate governance and transparency, by adoption of world class practices; and • also provides a very strong signal to the capital markets, and the international and domestic investor community, on our confidence in the company's future growth prospects. Benefits of the Proposed Offer for Reliance Energy's Shareholders The proposed infusion of new equity capital will lead to the following benefitsfor Reliance Energy: (a) Reliance Energy will rank among the 20 most valuable private sector companies in India in terms of all major financial parameters, including assets, sales, net worth, profits and market capitalization, reflecting the company's inherent financial strength (b) Substantial increase in the net worth from Rs. 10,542 crore to Rs. 20,000 crore by March 2009, an increase of nearly 100% (c) Further strength to our existing AAA credit rating profile (d) An increase in our borrowing ability from Rs. 10,000 crore to Rs. 20,000 crore, even at a conservative debt : equity level of 1:1 (e) An increase in the Book Value per share, from Rs. 447 per share to Rs. 720 per share Reliance Energy Limited: Reliance Energy, a part of Reliance - Anil Dhirubhai Ambani Group, is India'sleading private sector utility Company. Reliance Anil Dhirubhai Ambani Group currently has a market capitalisation ofover Rs.2,70,000 crore, net worth in excess of Rs.40,000 crore, cash flow ofRs.9,000 crore, net profit of Rs.5,000 crore and zero net debt. Reliance Energy is ranked amongst India's top 20 listed private companies interms of all major financial parameters, including assets, sales, net worth,profits and market capitalisation. Note A Group Company of Reliance Energy Limited, Reliance Power Limited is proposing,subject to market conditions and other considerations, an initial publicoffering of its equity shares and has filed a Draft Red Herring Prospectus(DRHP) with the Securities and Exchange Board of India (SEBI). The DRHP isavailable on the website of SEBI at www.sebi.gov.in and the respective websitesof the BRLMs and CBRLMS at www.kotak.com, www.ibb.ubs.com/Corporates/indianipo,www.abnamroindia.com, www.db.com/India, www.enam.com, www.icicisecurities.com,www.jmfinancial.com, www.jpmipl.com, www.sbicaps.com and www.macquarie.com/in. This media release does not constitute or form part of any offer or invitationto sell or issue, or any solicitation of any offer to purchase or subscribe for,any equity shares, nor shall it or any part of it nor the fact of itsdistribution form the basis of, or be relied on in connection with, any contractor investment decision. Any potential investors should note that investment inequity shares involves a high degree of risk. For details, potential investorsshould refer to any Red Herring Prospectus that may be filed with the DesignatedStock Exchange in future including the section titled "Risk Factors". This announcement has been prepared for publication in India and may not bereleased in the United States. This announcement does not constitute an offer ofsecurities for sale in any jurisdiction, including the United States, and anysecurities described in this announcement may not be offered or sold in theUnited States absent registration under the US Securities Act of 1933 or anexemption from registration. For further Information Please contact: Venkatesh Somayaji on 9312782480 or atvenkatesh.somayaji@relianceada.com This information is provided by RNS The company news service from the London Stock Exchange