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CCEA okays Reliance Petro, HDFC Bank proposals

Tara Shankar Sahay in New Delhi

The Cabinet Committee on Economic Affairs on Thursday approved the Reliance Petroleum Limited proposal for divestment of up to 780 million equity shares held by Reliance Industries Limited in tranches through a global depository receipts issue.

This was informed by Union Parliamentary Affairs Minister Pramod Mahajan at a press briefing after the CCEA meeting. Prime Minister Atal Bihari Vajpayee chaired the meeting.

The divestment will take place through a GDR issue and issue of foreign currency convertible bonds and ordinary shares.

Reliance Industries expects to raise between $750 million and $1 billion at current market price. He said that the shares that are proposed to be offered for divestment represent 14.99 per cent of the paid-up capital.

The CCEA also gave approval to the HDFC Bank proposal for an international equity offering of $150 million, with a right to retain oversubscription up to 15 per cent of the issue size.

The approval is subject to condition that the issue and the prices shall be in the conformity with Sebi/RBI guidelines.

Mahajan informed that the proceeds will be utilised for expansion of the bank's activities and to meet working capital requirements.

The proposed American depository receipts issue will raise FII holding in HDFC Bank to 26.53 per cent.

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