Reliance Retail plans to buy out minority shareholders

livemint.com:

MUMBAI : Mukesh Ambani-controlled Reliance Industries Ltd (RIL) is looking to buy out the minority shareholders of Reliance Retail Ltd for a total sum of up to ₹1,071.27 crore and make its step-down retail unit into a fully promoter-owned company in what can be a termed as a precursor to a potential demerger and a separate listing of the retail business. Reliance Retail said on Friday that its board approved a proposal to reduce the equity share capital to the extent held by shareholders other than its promoter and holding company, Reliance Retail Ventures Ltd (RRVL).

According to the plan, post the share buyback, the holdings of the minority shareholders will be cancelled and extinguished. Minority shareholders hold only 0.09% or 7.87 million shares of Reliance Retail against the total outstanding equity shares of 8.99 billion.

The company is offering ₹1,362 per share — determined on the basis of valuation obtained from two reputed independent registered valuers — towards the capital reduction, it said. “The capital reduction shall be pursuant to Section 66 of the Companies Act, 2013 and shall be subject to approval by members of the company by way of special resolution and obtaining the sanction and confirmation from the National Company Law Tribunal, Mumbai bench.

The company will be sending notices to its shareholders for this purpose," it said in a filing to the stock exchanges. RRVL holds 8.99 billion shares representing 99.91% of the issued, subscribed and paid-up equity share capital of the company.

While Reliance Retail has no plans to list its equity shares on the stock exchanges, it was observed that the number of equity shares traded is increasing every month. In June, a total of 245,229 equity shares were