RNRL + Reliance Power – Merger of Two Empty / Shell Companies
July 2, 2010
Reliance Natural Resources’ (RNRL) and Reliance Power’s boards of directors will meet on July 4, to consider the merger of two Anil Dhirubhai Ambani Group (ADAG) companies. The companies have not yet disclosed any details of the proposed merger.
RNRL is a Shell company which was supposed to get Gas from RIL but failed to secure so after Master Manipulation by RIL and the vicious circle in Delhi circuit. Now that there is no line of business for RNRL, the company will be merged with another ADAG company Reliance Power.
We advise our readers and investors to keep away from both the companies – RNRL and Reliance Power. We sometimes wonder why SEBI keeps quiet when the stock prices move before all these hyped announcements and why does it lack the will to investigate ?24 months have passed since we first evaluated the Reliance ADAG Stocks and yet today none are worth investment grade.
Reliance Power (RPWR) has announced the scheme of merger with Reliance Natural resources (RNRL) in an all stock deal, subject to necessary approvals. The share swap ratio is 1:4 (1 RPWR share for every 4 shares of RNRL)
Goldman sAchs has re-iterated a Sell on Reliance Power with 12-m SOTP TP of Rs119/share implying potential downside of 32%.