Reliance Retail’s JV with UK logistics co Wincanton falls through

The high profile joint venture between Reliance Retail and the UK-based supply chain powerhouse Wincanton which was to manage RRL’s transportation, warehouses and inventory have been called off. According to The Economic Times report, the reason cited for the fall off was that RRL was unlikely to meet its initial growth projections and generate expected volumes.

RRL and Wincanton had signed an MoU and negotiations had reached advanced stages. The talks, however, were derailed after Wincanton saw a gap emerging between its expectation and what was being rolled out on the ground in terms of RRL’s expansion. In November 2006, India’s largest conglomerate Reliance Industries announced its foray into consumer retail with Rs 26,000-crore investment.

The company has also initiated a slew of measures to tide over the current crisis, perpetuated by a slowdown in Indian retail consumption and global financial turmoil. The company has recently reduced the size of its Ahmedabad hypermarket by two-thirds and initiated several cost-cutting measures. A senior source pointed out that some tough measures are on the anvil yet again.

RIL, Essar Oil eye ONGC`s `unviable` Kakinada refinery

After the UK-based Hinduja group, Oil and Natural Gas Corporation's (ONGC) proposed Rs 26,500-crore refinery at Kakinada, Andhra Pradesh, has found new suitors in Reliance Industries (RIL) and Essar Oil.This is despite ONGC maintaining its stand that the refinery is not financially feasible unless the Andhra Pradesh government gives it more incentives.

The 15-million-tonne-per-annum refinery will be implemented by Kakinada Refinery and Petrochemicals (KRPL). While ONGC's subsidiary Mangalore Refinery and Petrochemicals (MRPL) holds 26 per cent stake in KRPL, IL&FS holds 51 per cent and the remaining stake is held by the Andhra Pradesh government.

Read more in The Business Standard article.

Shell may offer $6.7 bn for 30% stake in RIL's D-6 block

Royal Dutch Shell is believed to be considering a bid to acquire up to 30% stake in Reliance Industries’ (RIL’s) discovered gas block in the Krishna-Godavari basin. Shell’s bid could be around $6.7 billion. This will value RIL’s D-6 block, with reserves of 14 trillion cubic feet (tcf) of gas, at over $22 billion, however RIL strongly denied the rumours.

Total of France, ENI of Italy and Brazil’s Petrobras have also shown interest in the D-6 block, which is set to commence commercial operations in a couple of months. BG and Exxon officials declined to comment on any interest in the KG basin block.

Read more in The Economic Times article.

RIL in talks with foreign firms to sell 10% stake in KG Basin D6 block

Mukesh Ambani-led Reliance Industries is mulling over brining a new strategic foreign partner for deepwater exploration in its KG Basin D-6 block and is understood to be talking to many players for divesting up to 10 per cent stake.RIL is considering this deal as part of a long-term strategic move as the company needs a partner for the level of deepwater drilling that is required at this particular block.

The potential partners could be among the global energy giants like ExxonMobil, Shell, BP, Total and Petrobras, as these are the companies with required expertise.The talks are on with most of the big global energy exploration and production players.

Global investment banking giant Goldman Sachs is one of the key consultants for the deal and RIL is sharing necessary data with the prospective partners to reach a valuation for the deal.

Read more in The Economic Times article.

RIL buys Malaysian polyester maker Hualon

Reliance Industries (RIL) today announced the acquisition of Hualon Corporation of Malaysia, the world's largest integrated polyester manufacturing company, for an undisclosed amount.

E&Y had invited bids for the family-run company, which has turnover of nearly Rs 3,200 crore, nine months ago.This is RIL's second overseas acquisition in the textiles industry. The first purchase was Trevira, a polyester manufacturer in Germany, for about Rs 440 crore three years ago.A RIL spokesperson declined to reveal the deal size of the latest buy.

The acquisition will help RIL consolidate its position as the world’s largest polyester manufacturer with capacity of 2.5 million tonne, 25% increase from the current capacity and increase in revenue by Rs 4,000 crore next year. The Hualon acquisition will help RIL clinch more than 7% of the global market share in polyester fibre and yarn business as against its existing share of over 5%.

Read more in The Business Standard article.

Mukesh zooms into Yashraj films for JV

Reliance Industries and Yashraj Films, the makers of hits such as Kabhie Kabhie and Dilwale Dulhaniya Le Jayenge, are in talks for a joint venture to set up multiplexes, run entertainment channels and produce soap operas for television.

People close to the negotiations say that Reliance Retail, an associate of Reliance Industries, will float a new company where Yashraj Films will hold close to 26%. The new company will use the space provided by Reliance Retail’s gigantic malls to set up a chain of multiplexes across the country.

The Reliance group is believed to have committed over $50 million for the joint venture. “We are in talks with several players for new initiatives that we are currently evaluating. We have had talks with Mukesh Ambani as well, but there has been no outcome as yet,” Sanjeev Kohli, CEO, Yashraj Films, told ET. An email to Reliance Industries went unanswered but senior group officials confirmed the talks with Yashraj Films.

The move ties in well with Reliance Retail’s plans of setting up mega malls in urban centres, replete with an array of entertainment, food courts and other services. Yashraj Films, with domain expertise in entertainment, will be a formidable partner for Reliance.

Read more in The Economic Times article.

JM Financial may buy brokerage after Morgan Stanley split

JM Financial Ltd, Morgan Stanley’s former partner in India, may buy a local brokerage to rebuild the equity sales and research teams it sold to the New York investment bank, director Vishal Kampani said.

Kampani last month helped his father Nimesh negotiate the breakup with Morgan Stanley, the world’s second-biggest securities firm. The US bank acquired the equity sales, trading and research teams from the venture for $425 million (Rs1,835 crore).

JM retained the retail, investment banking and fixed-income units that generated 45% of revenue and a client list including Reliance Industries Ltd and three-quarters of India’s top 100 companies. By going alone, JM may struggle to meet its biggest clients’ appetite for funds and financial services as Indian companies embark on record stock sales and acquisitions.

Read more in The Live Mint article.

RIL to divest in oil and gas arm abroad

Reliance Industries Ltd (RIL) will induct a strategic partner in its overseas oil and gas projects which are being spun off into a new entity.

Sources familiar with the development said RIL is to divest 20 to 25 per cent in the Dubai-based Reliance Exploration and Production DMCC, the holding company for RIL’s foreign oil and gas projects.

Global energy major Chevron Corporation, which has equity interest in RIL’s subsidiary Reliance Petroleum, might be the preferred partner for Reliance Exploration, they added. An RIL spokesperson declined to comment.

Read more in The Business Standard article

Mother of all deals!!

There’s yet another big global deal brewing and this might turn out to be a real blockbuster. It’s actually a global petrochem powerhouse in the making. Reliance Industries, which has been talking to the $49-billion Dow Chemicals-the world’s second-largest chemicals company-has inched closer to signing an MoU with the US company.

According to sources, talks are at an advanced stage and the two sides are expected to make a formal announcement by this weekend. RIL chairman Mukesh Ambani, along with a top-level team, including Nikhil Meswani, Kamal P Nanavaty, Alok Agarwal and Haresh Shah, is scheduled to meet Dow CEO Andrew N Liveris and the rest of the senior team for the final round of negotiations.

Read more in The Economic Times article.

IPCL merger with RIL from April 1

Reliance Industries (RIL) on Saturday approved the amalgamation of Indian Petrochemicals Corporation Ltd (IPCL) with itself, with the share swap ratio pegged at 1:5.

It means shareholders of IPCL will get one RIL share for every five shares they hold. The board of IPCL has also approved the merger with RIL. The merger will be effective from April 1, 2007, an RIL release said.

Read more inThe Times of India article.

IPCL set to merge with Reliance Industries

Ending months of speculation, Reliance Industries (RIL) said today that it is considering merging its group firm, Indian Petrochemicals Corporation (IPCL) with itself.

The boards of both the companies will meet on March 10 to consider the plan, RIL said in a statement to the Bombay Stock Exchange after the markets closed for the day

Analysts say Reliance was supplying raw materials to IPCL, which was then making the final products for the end-user industries like rubber. "Post-merger, RIL would offer end-to-end product solutions which would give it a pan-Indian and perhaps Asian dominance," said an analyst.

Analysts also said the merger may help RIL to increase its revenue from chemicals by as much as 4% to 48% of the total. IPCL uses naphtha made at the parent's refinery as feedstock to make chemicals.
Read more inThe Business Standard article.