Reliance Industries zoom 3% as Future Group-Reliance Retail deal gets Sebi nod

Overall, RIL will acquire Future Group's businesses on a slump sale basis for lumpsum aggregating of Rs24,713cr.

Jan 21, 2021 12:01 IST India Infoline News Service

RIL, Reliance Industries
Investors were upbeat on Reliance Industries (RIL) during Thursday's trading session after the company's retail arm Reliance Retail and its merger agreement with Future Group's retail subsidiaries received market regulator Sebi's approval. Reliance Retail and Future Group deal has been witnessing setback due to Future Group's dispute with Amazon, and the approval comes as good news as the behemoth deal nears one-step closer to reality.

At around 11.56 am, RIL was trading at Rs2116.55 per piece up Rs61.70 or 3% on Sensex. The stock has touched an intraday high of Rs2118 per piece in early deals.

At the current market price, RIL's market valuation stands nearly Rs13.42 lakh cr. RIL remains the largest company on exchanges in terms of market capitalisation followed by TCS.

Sebi approved the deal on January 20, however, listed out few conditions in accordance with the Composite Scheme of Arrangement.

In its letter, Sebi on Reliance Retail and Future Group deal, said, "Company shall ensure that the shares of the transferee entity issued in lieu of the locked-in shares of the transferor entities are subjected to lock-in for the remaining period post scheme.”

Sebi also highlighted about the dispute with Amazon in the letter, by saying, "Company shall ensure that the details of the complaints made by NV Investment Holdings LLC (Amazon), the submissions of Future Retail Limited and the counter submissions of Amazon and all the proceedings pending and completed related to the same in the Delhi High Court Order in CS(COMM) 493/2020, the Award of Emergency Arbitrator in the Singapore International Arbitrator Centre or any other ongoing court/ arbitration proceedings, or any orders issued therein are bought to the notice of the Shareholders of the listed entities involved in the scheme while taking shareholder approval on the scheme. Further the same shall also be brought to the notice of NCLT while filing the draft scheme for their approval.”

"Company shall ensure that any future disputes, complaints, regulatory actions or proceedings, or orders issued therein involving the draft scheme if any, shall be brought to the notice of shareholders prior to the approval by NCLT," Sebi's letter added.

Also, Sebi directed that "Company shall ensure that as a part of the notice to a shareholder seeking their approval on the scheme, the following fact should be suitably highlighted:

74.2% of the Business Value of the Future Enterprises Limited post amalgamation of all the Transferor companies is getting transferred to Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited and these two companies would not be seeking listing post the scheme of arrangement’."

The Mukesh Ambani-backed RIL signed the merger deal with Kishore Biyani-backed Group's retail and logistic subsidiaries through Reliance Retail Ventures in August 2020.

According to the agreement, Future Group's retail & wholesale undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of Reliance Retail Ventures (RRVL). Further, the Future Group's logistics & warehousing undertaking will be transferred to RRVL.

The acquisition is being carried as part of the Scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises. The companies involved are the ones listed on stock exchanges apart from Future Enterprises.

Overall, RIL will acquire Future Group's above-mentioned businesses on a slump sale basis for lumpsum aggregating of Rs24,713cr. 

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