| Ambani: New role
Mumbai, Jan. 18: It was one of the smoothest corporate takeovers in recent history when Anil D. Ambani, vice-chairman and managing director of Reliance Industries, was appointed the chairman of BSES today.
Two other Reliance nominees were today appointed on the BSES board as whole-time directors. The nominees are S. C. Gupta, formerly a director of BSES, and J. P. Chalasani, director of BSES Infrastructure Finance and chief executive of BSES’ two distribution companies in New Delhi. Satish Seth, an existing Reliance nominee on the board, has been designated vice-chairman.
While Gupta has been appointed as director (operations), Seth will be responsible for business development. Thus day-to-day operations of BSES would now be under the Reliance team.
Dua, who was officiating as BSES chairman and had earlier expressed solidarity with Reliance, goes back as director (technical) which was his original posting.
In a cryptic statement, Anil Ambani, the new BSES chairman, said: “We welcome BSES, its shareholders, employees, customers and all other stakeholders to the Reliance family.”
The change at the helm happens when Reliance’s open offer for 20 per cent equity in BSES is still in progress. The offer, which opened on January 17,2003, will end on February 15.
At present, Reliance holds 44.12 per cent in BSES while financial institutions hold 36.29 per cent, GDRs 1.94 per cent, FIIs/NRIs/OCBs hold 4.27 per cent and the balance 12.72 per cent is with 1.4 lakh retail investors. The FIs feel the BSES share price of Rs 230.10 was far adequate and does not represent the true potential of the share.
BSES said no competitive bids were received within the stipulated period of 21 days from the date of the public announcement.
In line with the requirements of the Securities and Exchange Board of India (Sebi)'s takeover code, Reliance deposited Rs 743 crore in cash in an escrow account. The amount represents 100 per cent of the consideration payable on completion of its open offer for BSES, assuming full acceptances.
Three additional Reliance nominees have thereafter been appointed on the BSES board.
BSES is one of largest distributors of power in the country. It is one of the two licensees for distributing power in Mumbai, which is considered as a lucrative circle. Additionally, the company along with Tata Power has been recently mandated to distribute power in New Delhi.
The takeover was complete in all respects, when the power utility itself issued a statement today stating that “BSES becomes part of the Reliance group, in realisation of the vision of the founder and visionary chairman of Reliance Dhirubhai Ambani. To establish Reliance as India’s only integrated energy company with interests in oil and gas exploration and production, refining and marketing of petroleum goods, petrochemicals and power.”
With the new promoters at the helm, who are known for their dynamism, the newly-inducted members in the Reliance group said BSES will gain from Reliance’s philosophy of establishing world-class operations on a global scale, practicing global competitiveness and delivering international quality products and services.
“BSES, and its customers, shareholders, and employees, will benefit from Reliance's proven vision, management strength and project execution capabilities, and demonstrated-track-record of superior operational and financial performance,” the company said.