Reliance "Ownership Issues"

[Arun 795]

well, as quoted by Praskash Bajpai in the previous article, it doesn't matter whether it is Anil or Mukesh on the top, but its just a matter of putting the technology in place. Anil Ambani has already unveilied his policies for Reliance Capital & Reliance Energy.

Anil unveils '6 Cs' plan for Reliance Cap, Energy

NDTV Correspondent

Sunday, June 19, 2005 (Mumbai):

A day after the Ambani brothers agreed to a split in the company holdings, Anil Ambani addressed the press at Ballard Estate in Mumbai.

Anil began by expressing deep gratitude to the guidance of his mother, Kokilaben who made the announcement of the settlement between the two brothers.

He named a new group 'Anil Dhirubhai Ambani Enterprises' to control the three companies that came under his fold after the settlement.

These include Reliance Capital, Reliance Energy and Reliance Infocomm.

Soon after REL re-elected him as its chairman today, the younger Ambani announced massive expansion plans in gas-based, coal-based and hydro and nuclear power generation in the next ten years.

He expressed the intention to form private-public partnership for nuclear power generation. REL also has "deep commitment" in non-conventional power -- solar and wind power, he added.

Outlining the agenda

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Elaborating on his business plans, Anil first spoke of Reliance Energy, describing it as the leading and most valuable utility company in India.

He announced plans of an investment of Rs 1000 crore in Reliance Energy, which he said was a reflection of strong confidence in the growth prospects of the sector.

REL shares will be sold at Rs 573 per share at 8 per cent premium over six months.

Moving on to Reliance Capital, Anil outlined an agenda to turn the company into a financial services powerhouse.

He said an investment of Rs 2000 crore would be made in Reliance Capital in accordance with SEBI regulations.

Investment in Rel Cap would be at Rs. 228 per share at Rs. 40 premium.

Potential investors

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Anil Ambani also stressed that his enterprise will concentrate on the six C's, which include customer, customer care, corporate governance, corporate values, creativity, competitiveness.

Dispelling fears of cash crunch in carrying out the expansion, he said potential investors have been talking to him for investing in the three companies REL, Reliance Infocomm and Reliance Capital.

Moreover, he said the group will list Reliance Infocomm in bourses in due course to mop up additional capital.

Demerger plan

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The announcement of the settlement between Mukesh Ambani and Anil Ambani was made through a letter by their mother Kokilaben on Saturday.

Under the agreement, Mukesh will retain flagship company RIL and its petrochemical venture IPCL while Anil will get Reliance Infocomm, Reliance Energy and Reliance Capital.

Kokilaben, widow of the Reliance patriarch Dhirubhai Ambani, disclosed the details of the settlement after a marathon family meeting, which lasted all through Friday night.

Later, the board of flagship company Reliance Industries Ltd met to approve the demerger plan. Anil Ambani, who resigned as the vice chairman and managing director of Reliance Industries, did not attend the board meeting.

Family share

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As part of the settlement, the elder Ambani sibling Mukesh Ambani will buy out Anil Ambani's stake in Reliance Industries and will control the family's share.

The agreement is based on recommendations of ICICI Bank chairman and family friend K V Kamath and Kokilaben.

Of the Ambani family's 34 per cent shareholding in RIL, both brothers own 30 per cent each while the mother holds 40 per cent of this stake.

In effect, Mukesh will now control 60 per cent of the family's share in Reliance Industries.

Telecom business

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On the other hand, Mukesh's personal stake of 55 per cent in Reliance Infocomm will be bought by Anil.

According to the demerger plan, Reliance Industries shareholding in Reliance Energy, Reliance Capital and Reliance Infocomm will be demerged.

RIL's stake in these three companies will be put into a new holding company and Anil will be handed control of the holding company.

Eventually, Mukesh will control RIL and IPCL while Anil will steer Reliance Infocomm, Reliance Energy and Reliance Capital.

[Chirag 5]

Am interested in knowing abt the branding issues! Who retains the legacy of RELIANCE Brand?? I doubt if both can retain the same brand!

[deepu 0]

Anil to put Rs 3,000 cr in REL, Capital

Within 24 hours of taking over the reins of the Anil Dhirubhai Ambani Enterprises Group, the name he has given to his new business empire, Anil Ambani on Sunday announced that he would invest Rs 3,000 crore (Rs 30 billion) in Reliance Energy and Reliance Capital from his "personal resources".

He confirmed that all the three companies, the third one being Reliance Infocomm, would be demerged from the Reliance group.

There would not be any specific flagship company in the group and all the three firms would get equal importance, he added. Also, the ADAE group will be free to use the Reliance logo.

Addressing his first press conference in his new avatar, Ambani said he was putting in his own money as he had enormous confidence in the potential of these companies.

"I hope the shareholders appreciate this confidence. So far, I have been managing Reliance Energy. Now I am an investor too," he said, adding that he would always remain a Reliance Industries shareholder.

Ambani will invest Rs 2,000 crore (Rs 20 billion) in Reliance Capital at Rs 228 per share -- a 42 per cent premium over the average share price of the last six months.

Reliance Energy will get Rs 1,000 crore (Rs 10 billion) from Ambani at Rs 573 per share, representing 8 per cent premium over its average price of the last six months. He also invited the existing long-term investors to put in fresh capital into the company.

However, he did not mention the timing of the proposed investments. When asked about it, he only said "I gave you a broad vision."

Analysts closely watching the Reliance spat over the last seven months said the investment would take place only after Reliance Industries, the principal shareholder, pulled out of these companies.

Ambani, who flew into the city from Tirupati on Sunday morning, attended the board meetings of both Reliance Energy and Reliance Capital.

He was elected the chairman of Reliance Capital replacing D Chaturvedi, while vice-chairman Anand Jain and a few other independent directors -- D J Kapadia, Sandeep H Junnarkar and Alok Agarwal -- resigned from the board. They were replaced by S S Thakur, Rajendra Chitale and Amitabh Jhunjhunwala.

Ambani said the ADAE Group could be listed if necessary in future. However, Reliance Infocomm would be listed "in due course". He hinted that the 24 per cent holding of foreign institutional investors in Reliance Capital could be raised.

Ambani said he wanted Reliance Capital to become a full spectrum financial services power-house and among the top three financial services firms in India.

"The company would explore the possibility of becoming a bank as and when the Reserve Bank of India regulations allow it do so."

On Reliance Infocomm, the other Reliance group company now under his control, Ambani said the company had a great future and it was reflected in the fact that he had been flooded with calls in the last 24 hours from potential investors.

He also ruled out any top level changes in the company. "The 43,000-plus employees of Infocomm have done a spectacular job and the top team is immensely talented," he said.

On Reliance Energy, Ambani said his investments would increase the company's resources for various investment plans. In coal-based power generation, the company is bidding for a Rs 1,000-crore (Rs 10 billion) project in Uttar Pradesh. It is in talks with the Orissa government for setting up a 12,000 MW power project in the state.

It is also developing a 3,740 MW gas-based power generation project at Dhirubhai Ambani Energy City in Uttar Pradesh. In addition, it is in the process of implementing a series of projects in gas-, hydro- and wind-based power projects.

The ADAE group has also bid for the privatisation of Delhi and Mumbai airports. It has been shortlised for the mass rapid transit system between Andheri-Ghatkopar and the Mumbai trans-harbour project which envisages sertting up of 22 km bridge over sea connecting Sewri and the Nhava Seva Port.

Courtesy - rediff.com

[deepu 0]

A day after Anil Ambani is raring to go!!

The two warring Ambani brothers, Mukesh and Anil, seemed to have buried their dispute and have decided to move full steam ahead, following the amicable settlement to the Reliance ownership issue.

Anil Ambani gave more than a hint of things to come at a press conference on Sunday, barely a day after the division the Reliance empire.

While talking to the media, he said: "There is only one way (to go) and that's forward. This car is in a one-way street and it has no reverse gear."

Addressing the media at the Reliance Centre in Mumbai's Ballard Estate area, he further said: "All stakeholders of the entire Reliance Group -- including vendors, lenders, shareholders and investors -- should be moving forward now."

From the huge Reliance pie, Anil gets Reliance Infocomm, Reliance Energy and Reliance Capital.

At Saturday's press conference, the younger Ambani announced that the above businesses would be managed under the umbrella of Anil Dhirubhai Ambani Enterprises (ADAE).

He said that at Anil Dhirubhai Ambani Enterprises, the focus will be on six Cs: customers, customer care, corporate governance, corporate value, creativity and competitiveness.

When asked if the settlement between the brothers was mutually accepted, Anil said the brothers had departed "on a cordial note and investors should not have any problems now because our focus will be on our businesses."

He expected that there will no interference from Reliance Industries Ltd in the day-to-day operations of his companies.

Mukesh Ambani will head RIL and IPCL according to the settlement formula.

Courtesy - rediff.com

[Arun 795]

Excerpts from the media...

Even while it was becoming clear that Reliance Infocomm would be headed by Anil Ambani, telecom analysts had felt that little would change with respect to the company's management."They are the most innovative and proactive telecom company in the country, ever on their toes," one of the analysts had said. The opinion was that an outwardly more vocal person such as Anil Ambani (in comparison to his brother) would suit a retail, service industry, such as telecom.

Even otherwise, the culture at Reliance has been that very few officials are distinctively high profile in the public realm, felt analysts. However, the market is curious about who will replace Nanavaty, who heads the most well known business of Reliance Infocomm which is wireless operations. The next large project that remains to be announced as operational at Reliance Infocomm is Netway, a retail offer with voice, television and streaming video facilities.

Mukesh bids adieu to Reliance Infocomm

June 20, 2005 15:06 IST

Last Updated: June 20, 2005 15:40 IST

After having settled the ownership issue with his brother Anil Ambani, Mukesh on Monday sent an "emotional" farewell message to the employees of Reliance Infocomm, considered his pet project.

In an e-mail message to the employees of Infocomm, Mukesh said, "my younger brother Anil is taking over the stewardship of Reliance Infocomm. He has enormous energy and drive and we share a common commitment to take forward the legacy of our father Late Dhirubhai Ambani."

Addressing the employees as "Reliance Infocommers", Mukesh said the Infocomm business has grown from Dhirubhai Ambani's dream of making the cost of a phone call cheaper than that of a post card.

"I take this opportunity to congratulate you for your contribution in translating that dream into a reality," Mukesh said in the e-mail message.

Reliance Infocomm is now in full bloom with nearly 21 per cent of India's mobile market. "It symbolises the next generation communication organisation, connecting hundreds of millions of Indians with each other and the world and engages millions of young Indians working in the field of information technology enabled services, with economic opportunity in the developed world," he said.

Working together with dedication and passion "we have created a new milestone in Reliance historic saga of achievements".

Sharing a great sense of satisfaction in working with all the employees, Mukesh said, "as the responsibility of caring for Reliance Infocomm and leading it is now being handed over to my younger brother Anil I send my best wishes to the new leadership for greater accomplishments."

"Thanks for making Reliance Infocomm... I am sure that you will give your best to Anil and his team," Mukesh said, adding, "I take this opportunity to wish each one of you every success and glory in your chosen carrier as well as for good cheer, health and prosperity."

Mukesh said that he had all satisfaction to build this enterprise (Reliance Infocomm) from scratch ever since 2001.

"You are one of the over 40,000 bright young men and women from over 1400 geographical locations in India who have nurtured Reliance Infocomm to blossom as a pan-India voice and data service providers," he said.

[SexyGurl 0]

Is Anil Ambani less capable then Mukesh!! what u guys think!!!

34376[/snapback]

This is a very important question. Hope the kid who's just been handed over a prized asset ... and a huge responsibility ! has the balls to take it.

True, you can't pass judgement on Anil, without giving him a chance .... and given the lack of any info on his competence. But that itself is somewhat worrisome, that Anil is yet show any meaningful achievement, so far in his life !! (do others disagee?).

Putting together Infocomm was no mean task .... and so far, it's clearly been the icon of Mukesh's capabilities.

(I am not counting the Jamnagar refinery .... which is the brightest jewel, because I am not sure, who made that refinery click .... it could be Dhirubhai himself ! or one of his kids .... but for lack info, I would give marks to none for the refinery).

If Mukesh could do an Infocomm, he is capable of re-doing something like once again ... and maybe more.

I hate to think, we need to try out an untested product (Anil) ... into something sooo.. important. Indeed Infcomm has the potential to outdo both the Jamnagar refinery, as well as RIL in totality. But only if Anil has the balls to do it !!

Sadly, his past (especially, recent past) record is not reassuring. He seems to lack shrewdness, has some ego problems as well .... tends to dream in air, but isn't seen to be convert those dreams.

How I wish, Anil proves me wrong

Edited June 21, 2005 by bhutes

[city02 63]

I'm not really a supporter of Anil (believe it or not - and I've never met him either, nor am I a shareholder in REL or RCL) but this is so presumtuous and absurd that I strongly feel a response is required:

Hope the kid who's just been handed over a prized asset

No sane person would refer to a billionaire & Wharton MBA (Mukesh had to drop out of Stanford since Dhirubhai called him back to India) in his mid-forties as a 'kid' specially after he has spent over 2 decades at the same company.

Not only has Anil been the public face of Reliance to the investors for over a decade, he has also directly handled most of the major financing deals including the largest ever 100 year bond deal by ANY Indian company EVER.

Here is a quote from his site:

http://www.anildambaniforindia.com/anil/en...d/about_ada.htm

Anil joined Reliance in 1983 as the co-Chief Executive Officer of the company. He is credited to have pioneered many financial innovations in the Indian capital market. He pioneered India's first forays into overseas capital markets with international public offerings of global depository receipts, convertibles and bonds. He has directed Reliance in its efforts to raise, since 1991, around US$ 2 billion from overseas financial markets; with a 100-year Yankee bond issue in January 1997 being the high point.

I hate to think, we need to try out an untested product (Anil) ... into something sooo.. important.

Its hard to argue that he's not adequately qualified or 'untested':

Adjudged 'CEO of the Year' at Platts 2004 Global Energy Awards, December 2004. Anil was ranked No.1 for the second consecutive year, in The Power List 2004 published by India Today, in March 2004. He was voted 'MTV Youth Icon of the Year', in September 2003. He was rated as one of 'India's Most Admired CEOs' for the fifth consecutive year in the Business Barons - TNS Mode opinion poll, in July 2003.

He was conferred 'The Entrepreneur of the Decade Award' by the Bombay Management Association, in October 2002. He was awarded the First Wharton Indian Alumni Award by the Wharton India Economic Forum (WIEF) in recognition of his contribution to the establishment of Reliance as a global leader in many of its business areas, in December 2001. Mr. Ambani was named amongst 'The Power 50 - India's 50 most powerful decision-makers in Politics, Business & Finance' by the leading business magazine Business Barons, in August 1999. He has been chosen by Asiaweek magazine, for its 'Leaders for the Millennium in Business and Finance' and was introduced as the only "new hero" in Business and Finance from India in June 1999.

Business Barons included Mr. Ambani in its list of 'India's 25 Most Influential Business and Financial Leaders', in June 1998. He was conferred the 'Businessman of the Year 1997' award by India's leading business magazine, Business India, in December 1997.

Anil is the member of Uttar Pradesh Development Council. He is also a member of the Board of Governors of the Indian Institute of Technology, Kanpur. He is member of the Board of Governors, Indian Institute of Management, Ahmedabad. He is also a member of the Central Advisory Committee, Central Electricity Regulatory Commission.

Mr. Ambani is a member of the Board of Overseers, The Wharton School, USA.

In June 2004, Anil was elected as an Independent member of the Rajya Sabha - Upper House, Parliament of India. His term as Member of Parliament, India is a six year term, and expires in 2010.

He seems to lack shrewdness, has some ego problems as well .... tends to dream in air, but isn't seen to be convert those dreams.

Surely thats why he got Infocomm (lack of shrewdness).

Dhirubhai was one of the biggest dreamers so that is actually not a bad thing!

Mukesh has no shortage of 'ego problems' either so that's not unique.

In fact virtually no billionaires (in US$ or even Euros) have a lack of 'ego' in the world!

How I wish, Anil proves me wrong

Yes, of that you will be assured!

[SexyGurl 0]

See what sh*t he did with the 10,000 MW gas power plant at Dabri in UP. This is not the kind of execution reliance is known for.

A minor pointer ... REL bid for EPC of a power plant for Haryana SEB.

They have their pants wet right now ... since they quoted too cheap, relying on thier chinese supplier & joint-venture partner... who ditched them brutely.

Now, they will have the execute the EPC contract themselves .. at a loss.

This is not Reliance ... for sure.

[Basant 0]

power distribution sector is highly risky but very attractive in long run....

Reliance has proven credentials in terms of project planning & implemention (remeber Jamnagar refinery)

Both brothers are highly ambitious..... ego problem too..........Chela, chamchas are present in both camps.

CDMA based mobility by Ambanis was a big gamble and they have been sucessful. Now it is up to Anil to capitalise on this technology, spread the reach, improve customer care & satisfaction and attempt convergence.

Already there is a talk to treat whole of India as one circle and do away with call distinction-local, STD, intra-circle etc. In telecom, once the initial setup is created, there is no cost-difference between a local call or STD call. There are very little variable costs and no savings if the network is under utilised. Anil should take advantage of this and introduce one calling rate for all calls and plans allowing unlimited calls.

[city02 63]

See what sh*t he did with the 10,000 MW gas power plant at Dabri in UP. This is not the kind of execution reliance is known for.

Now, they will have the execute the EPC contract themselves .. at a loss.

This is not Reliance ... for sure.

34476[/snapback]

Its so weird for me having to defend the younger bro when I'm actually neutral!

But since someone needs to play devil's advocate here goes:

RIC's 10,000 Cr in bad debts accumulated due to monsoon hungama/postpaid fiasco which was amongst the biggest writeoffs in the telecom world is completely ignored by you?!

That's surely great execution...

Why are you being so biased/selective in your evaluation?

Maybe a former/disgruntled employee/vendor of Anil?

I won't even get into the horrific billing & customer service problems faced by RIC for over 1 year after launch simply due to poor planning.

Is that the Reliance you are talking about?

I'm not even bringing up (in further detail!)

network/congestion problems,

transparency, corp gov issues

with the whole roaming vs. WLL controversy (TSS/MSS),

unpaid ADC/incoming int'l call re-routing scandals,

license terms violations, millions of US$ paid to the govt in fines, ...

'People in glass houses should not throw stones.'