Punjab National Bank (PNB) to merge regional rural banks (RRBs) in UP, Punjab and Haryana

9th August 2005: PNB will merge its RRBs in Uttar Pradesh, Punjab and Haryana to create financially sound state-level entities. "We have received approval from both the Centre and state governments for merging our RRBs in Uttar Pradesh, Punjab and Haryana," a senior PNB official said.

However, the bank is yet to receive approval for merger of its RRBs in Bihar and Rajasthan. The bank has four RRBs in Bihar and two in Rajasthan. PNB will merge its three of the total 6 RRBs in Uttar Pradesh into one entity, while the remaining three will maintain their identity because of distance with each other.

The three RRBs, which will not be merged, are located in Jhansi, Gonda and Baudan. On the other hand, RRBs in Ghaziabad, Muzaffarnagar and Bijnor will be merged. Three RRBs of PNB in Haryana will form one entity, while two in Punjab will be merged into one. The PNB also has one RRB in Himachal, which will retain its identity.

Cisco Systems Inc. to takeover Nokia

8th August 2005: Cisco Systems Inc. is considering buying the world's top mobile handset maker Nokia in a bid to gain its wireless infrastructure technology. The paper, which did not reveal the source of its information, said U.S.-based Cisco had traditionally concentrated on acquisitions of niche technology players, but its Chief Executive John Chambers is believed to be interested in merging with a wireless infrastructure company. "Nokia has been identified as the most likely target," the paper said.

Cisco, the largest maker of Internet equipment, is worth around $123 billion (69 billion), while Nokia's market value is around $71 billion. The paper said Cisco's mainstay networking market was fast changing with the convergence of fixed-line and wireless networks, and Cisco needed a merger to acquire the technology to create intelligent wireless applications, which Finnish-based Nokia could provide. Cisco declined to comment. A Nokia spokeswoman in Helsinki also declined to comment.

Reliance Industries Ltd (RIL) forms 4 SPVs, clears demerger

6th August 2005: RIL board today cleared the decks for the demerger of the company’s business by creating four new entities in the areas of telecommunications, coal-based energy, gas-based energy and financial services. These are Reliance Communications Ventures, Reliance Energy Ventures, Global Fuel Management Services and Reliance Capital Ventures.

All shareholders of RIL will get shares of the four new firms in a ratio of 1:1. This means RIL shareholders will get one share each of Reliance Communications Ventures (face value Rs 5), Reliance Energy Ventures (Rs 10), Global Fuel Management Services (Rs 5) and Reliance Capital Ventures (Rs 10) for each share held. All the four companies will be listed on the stock exchanges.

“This will unlock value for all shareholders as they can participate directly in all the businesses that RIL has nurtured and brought to stature,” an RIL release said.

The appointed date for the demerger scheme is September 1 and is subject to approvals of the BSE, courts of law and shareholders. In the second stage, Reliance Energy Ventures and Reliance Capital Ventures are likely to be merged with two existing companies, Reliance Energy and Reliance Capital.

An Anil Dhirubhai Ambani Enterprises release said the group would have four listed companies— Reliance Capital, Reliance Energy, Global Fuel Management Services and Reliance Communications Ventures.

Ultimately, for every 100 shares held, an RIL shareholder will have about five shares of RCL, seven shares of REL, and 100 shares each of Global Fuel Management Services and Reliance Communications Ventures, as was indicated by Anil Ambani on Wednesday.

Minutes after the Reliance Industries announcement of the new demerger formula, Anil Ambani said he was glad that the board had accepted his position on fairness, transparency, the need to unlock value, and to increase value for over 2.3 million shareholders.

He said the equity share capital of Reliance Capital Ventures and Reliance Energy Ventures would be Rs 1,223 crore each. Global Fuel Management Services and Reliance Communications Ventures would have an equity share capital of Rs 611 crore each.

FIRST STAGE

RIL shareholders will get one share each of the four SPVs for every RIL share

  Reliance Capital Ventures

  Reliance Energy Ventures

  Global Fuel Management Services

  Reliance Communication Ventures

SECOND STAGE

All the 4 SPVs will be listed, after which the derived interest of RIL shareholders in each of the entities will be (for every 100 shares held in RIL):

  Around 5 shares in Reliance Capital Ventures

  Around 7 shares in Reliance Energy Ventures

  100 shares in Global Fuel Management Services

  100 shares in Reliance Communications Ventures