The Telegraph
Since 1st March, 1999
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Two Ambanis carve cake before empire

Mumbai, June 5: In the Ambani family, business still takes second place to birthdays.

Yesterday, the two battling brothers came together to celebrate the younger Anil’s birthday at Sea Wind, the skyscraper residence of the promoters of the Rs 100,000-crore Reliance group.

As the birthday cake was cut, the broad contours of the Reliance empire that is to be carved out between the two began to emerge, confirming what has been speculated upon in the media.

The brothers shared the cake with mother Kokilaben and other members of the family, except sisters Nina and Dipti who were holidaying abroad, sources said.

Anil, 47, is expected to get Reliance Energy, Reliance Capital and what is elder brother Mukesh’s pet project Reliance Infocomm.

Mukesh, two years older, will get the flagship company Reliance Industries Ltd (RIL) and the acquired business, IPCL, along with the group’s fledgling oil exploration activity.

“We feel it (settlement) would still take some time. You will appreciate, it’s a personal family matter and as soon as it is needed to be put in the public domain, the media will be informed,” a Reliance official said.

A possible sharing of the business in this manner has been known for some time, but the final settlement has not come through, apparently because of differences over Infocomm’s valuation.

Mukesh’s side wants it valued around Rs 29,000 crore while Anil’s figure is close to Rs 20,000 crore for the mobile telephony company, which is now the largest of its kind in the private sector with a crore subscribers.

In his report, K.V. Kamath, the chief executive of ICICI Bank who has in his personal capacity been helping the two brothers to reach a settlement with assistance from leading investment banker Nimesh Kampani of JM Morgan Stanley in valuation, is reported to have valued Infocomm at Rs 25,000 crore and each RIL share up to Rs 800, issues that have dominated the negotiations.

As part of the settlement, Anil wants a large cash component, apart from the three companies, the sources said. Infocomm and Energy are businesses that will guzzle loads of cash as they expand. Analysts reckon that the two businesses will require at least Rs 10,000 crore each in the next two years.

Anil has been meeting Infocomm officials to get to know the business. Ironically, it was Anil who had been the first champion of the group’s mobile phone business but lost interest later as Mukesh went on to build it into what it is today.

Senior officials of Infocomm have been given the choice of moving to RIL and four have expressed interest in taking that option.

The structure of the settlement is expected to begin to unfold over the next four to six weeks, sources said. However, the restructuring of group companies and legal formalities could take six months to be completed, they added.

Officially, the deal might be announced in the annual report of RIL to the millions of shareholders.

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