Reliance Industries (RIL) and Reliance Natural Resources (RNRL) will present a gas supply agreement to the government for its final approval in the next two weeks, in what could be the first concrete step in a rapprochement between estranged billionaire brothers Mukesh and Anil Ambani.
The new gas supply and purchase agreement, or GSPA, which is being negotiated between officials of the two companies, will ensure, subject to the government's blessings, 10-year gas supply, beginning 2012, to power plants of the Anil Dhirubhai Ambani Group (ADAG).
If the gas supply agreement is approved by the government, RIL could even consider buying equity stakes in gas-based power plants run by ADAG companies. Since there is no compensation involved in the new agreement between the brothers announced on Sunday, analysts feel that this could be a way for Mukesh to show his commitment towards Anil's power projects. "There is a possibility, though nothing is final, that RIL will pick up significant minority stakes in gas-based power plants as is the practice world-wide in case of fuel suppliers," says a source familiar with the matter.
"This will not be a sweetheart deal and RIL will pay for the stake at a fair valuation to be worked out. RIL need not take it, but the intention is there on both sides." However, this was denied by representatives of both the groups.
Even though the non-compete agreements have been scrapped, the two brothers have agreed to not use the Reliance brand name in businesses where the other is present if they enter sectors that were earlier out of bounds. The details of the new peace treaty were described to ET by a person familiar with its contents.
RIL and ADAG companies announced on Sunday that they were ending a set of non-compete agreements that had fuelled discord between them. But the reworked agreement, which modifies an earlier family settlement of 2005, seeks to ensure that if the wings of the undivided Reliance compete in a sector, only one can use that name. "Thus MDA cannot use the name Reliance for getting into financial services, insurance, entertainment, telecom. The same holds for ADA in oil and gas, retail, petrol pumps. There's a trademark agreement in place for this anyway," the person said.
The gas supply agreement could herald an era of wider collaboration between the two groups. This could include RIL buying telecom services and fibre-optic capacity from Reliance Communications, or RCOM, the telecom arm of ADAG. India's largest private sector company could also park surplus funds in the MF schemes of Reliance Capital, part of ADAG.
The new gas supply and purchase agreement, or GSPA, which is being negotiated between officials of the two companies, will ensure, subject to the government's blessings, 10-year gas supply, beginning 2012, to power plants of the Anil Dhirubhai Ambani Group (ADAG).
If the gas supply agreement is approved by the government, RIL could even consider buying equity stakes in gas-based power plants run by ADAG companies. Since there is no compensation involved in the new agreement between the brothers announced on Sunday, analysts feel that this could be a way for Mukesh to show his commitment towards Anil's power projects. "There is a possibility, though nothing is final, that RIL will pick up significant minority stakes in gas-based power plants as is the practice world-wide in case of fuel suppliers," says a source familiar with the matter.
"This will not be a sweetheart deal and RIL will pay for the stake at a fair valuation to be worked out. RIL need not take it, but the intention is there on both sides." However, this was denied by representatives of both the groups.
Even though the non-compete agreements have been scrapped, the two brothers have agreed to not use the Reliance brand name in businesses where the other is present if they enter sectors that were earlier out of bounds. The details of the new peace treaty were described to ET by a person familiar with its contents.
RIL and ADAG companies announced on Sunday that they were ending a set of non-compete agreements that had fuelled discord between them. But the reworked agreement, which modifies an earlier family settlement of 2005, seeks to ensure that if the wings of the undivided Reliance compete in a sector, only one can use that name. "Thus MDA cannot use the name Reliance for getting into financial services, insurance, entertainment, telecom. The same holds for ADA in oil and gas, retail, petrol pumps. There's a trademark agreement in place for this anyway," the person said.
The gas supply agreement could herald an era of wider collaboration between the two groups. This could include RIL buying telecom services and fibre-optic capacity from Reliance Communications, or RCOM, the telecom arm of ADAG. India's largest private sector company could also park surplus funds in the MF schemes of Reliance Capital, part of ADAG.
Source
No comments:
Post a Comment
Please remember...your comment should not contain nudity or vulger language in addition to advertisement of your blog/site or any product ...and should not hurt the readers emotions...if that will be case it will be removed on first review of admin staff... Regards