Reliance Energy Buy Back News

Reliance Energy board approves 25-per cent share buyback news

Reliance Energy Ltd (REL) says that its board of directors today approved the company's proposed buy-back of outstanding equity shares up to approximately Rs2,000 crore ($500 million), in two phases through stock market purchases from time to time.

The company has announced that it would buy back the shares up to a maximum of Rs1,600 per share, representing a premium of over 30 per cent to the low of Rs1,225 recorded during the calendar year 2008, and a premium of approximately 10 per cent to today's closing share price.

The company said it would finance the share buy-back from its own cash balance and cash equivalents.

With the board's approval to the deal, the Anil Ambani-promoted company will buy back shares up to Rs800 crore in the first phase of the buyback or approximately 10 per cent of the paid-up equity share capital of the company, and its free reserves.

Thias will be followed by a second buyback of 15 per cent of the paid-up equity share capital and free reserves, expending approximately Rs1,200 crore, subject to shareholder and SEBI approvals.

Reliance Energy said in a regulatory filing that it would buy the shares on the Bombay Stock Exchange and National Stock Exchange, through "a transparent mechanism of open market purchases, from time to time".

The buyback, the company said, would contribute to improving shareholder value, while reducing short-term volatility in the share price; deter speculation and, "send a strong signal to the capital markets on the perceived under-valuation of the company's share price".

The buyback will lead to a reduction in the outstanding number of equity shares, and consequently help the company boost its EPS and reflect an improvement in the return on net worth and other financial ratios. The buy back would also reduce the company's floating stock, contributing to higher valuations, and enhancing long term price performance;

Reliance said that the buy back would have no impact on leverage ratios, as the company is debt free at a net level.

The fully diluted equity capital of Reliance Energy is Rs279.53 crore. The shares purchased under the buy-back programme will be cancelled, as required under SEBI guidelines, leading to a reduction in the company's outstanding equity capital.

India Reliance Energy sets $500 mln share buy-back

MUMBAI, March 5 (Reuters) - India's Reliance Energy Ltd (RLEN.BO: Quote, Profile, Research), part of the Anil Dhirubhai Ambani Group (ADAG), on Wednesday said it would buy back up to 20 billion rupees ($500 million) of shares at a price of up to 1,600 rupees a share, a premium of 9.6 percent over Wednesday's close.

Reliance Energy was the top performer in India's main stock index in 2007, when its share price quadrupled. It shares have fallen more than 30 percent so far this year, more than the BSE index's 18.5 percent drop.

Anil Ambani, his family members and investment firms together hold 34.68 percent in Reliance Energy, according to data from the Bombay Stock Exchange.

Analysts say the buy-back offer may be aimed to restore some shine to ADAG companies, after a dismal stock market debut of the much-hyped Reliance Power Ltd (RPOL.BO: Quote, Profile, Research) last month.

Ahead of the news, shares in Reliance Energy closed 3 percent lower at 1,459.45 rupees on Wednesday. ($1=40.3 rupees) (Reporting by Devidutta Tripathy; editing by John Mair)

REL to buy back shares worth Rs 2000 cr at Rs 1600 each

( THE ECONOMIC TIMES ) MUMBAI: In a bid to ward off volatility and speculative activity in its share price, Anil Ambani-led Reliance Energy today said it will buy back shares worth Rs 2,000 crore at a price of up to Rs 1,600 each - a premium of close to 10 per cent over today's closing price.

The buy-back price represents a premium of over 30 per cent over Rs 1,225 - its lowest so far during calendar year 2008.

Shares of the company today closed at Rs 1459.45, down 3.01 per cent, on the BSE.

"The Board of Directors has approved a buy-back of its outstanding equity shares for an aggregate amount of up to approximately Rs 2,000 crore ($500 million), in two phases," the company said in a filing with the Bombay Stock Exchange.

The first phase would involve spending Rs 800 crore, representing 10 per cent of the paid-up equity share capital and its free reserves.

"A further amount of Rs 1,200 crore will be expended in the second phase, subject to necessary approvals by the shareholders, in terms of the provisions of the Companies Act, 1956 and relevant SEBI Guidelines," Reliance Energy said.

The amount represents an additional 15 per cent of the paid-up equity share capital and free reserves of the company.

The buy-back would be made from the Reliance Energy's balances of cash and cash equivalents, and is expected to reduce short-term volatility in the company's share price while also deterring any speculative activity in the stock, the company said.