Reliance Industries had received requests from Reliance Retail employees holding equity shares for providing them options to exit and liquidate their holdings, including by way of a listing of the equity shares. It has offered the shareholders of its subsidiary and unlisted unit Reliance Retail to swap their units with RIL shares. Reliance Retail shareholders will get one share of RIL against four Reliance Retail shares. Reliance Retail shares are not listed on any stock exchanges.

Reliance Retail Limited (RRL), is a company mainly engaged in ‘organised retail’ primarily catering to Indian consumers in various consumption baskets. The Company is a subsidiary of Reliance Retail Ventures Limited and an indirect subsidiary of Reliance Industries Limited.

Prantharthi Commercials Private Limited (PCPL), is a private company incorporated under the Companies Act, 2013 on 9th December 2019. The company is incorporated as a Special Purpose Vehicle (SPV) to execute this scheme with main object is to carry on business as merchants, traders, buyers, sellers, importers, exporters, franchisees, sales organizers, distributors, stockists, del-credre agents, C&F agents, wholesalers, retailers, developers, processors, brand and trademark owners and holders, label owners and holders, logo owners and holders, franchise holders, designers, consultants, service providers, dealers and to import, export, buy, sell or otherwise trade and deal in commodities, goods, articles, produce and merchandise of any kind including semi and manufactured products, goods, gadgets, materials of all kinds.

The board of directors and shareholders of the company are one and the same viz. Mr. Raja Ramchandran and Mr. Laxmidas Merchant each having 50% shareholding.

The company’s directors and shareholders seem to be employees of the group and holding directorship in multiple companies of the group since more than 20 years.

The Transaction

RRL had implemented two schemes namely Reliance Retail Employees’ Restricted Stock Unit Plan 2006 and 2007 under which Restricted Stock Units (“RSUs”) have been allotted to eligible employees. On exercise of the RSUs by some of the employees, Equity Shares have been allotted to them. Some RSUs are outstanding against which Equity Shares will be allotted on exercise before effectiveness of the scheme of arrangement (“Scheme”).

As the Equity Shares of RRL are not listed on any stock exchanges, RRL has been receiving requests from the employees holding Equity Shares for providing them options for exit and liquidity, including by way of listing of the Equity Shares. However, the Company has no plan to list its equity shares.

Reliance-Retail-Employee-Shares-Exit-1

To provide liquidity/ exit option, the Company is proposing the Scheme in terms of which, equity shareholders of the Company other than the holding company viz., Reliance Retail Ventures Limited (“Specified Shareholders”), are being given listed equity shares of Reliance Industries Limited (the ultimate holding company of the Company) and the corresponding equity share capital held by them in the Company is being reduced and cancelled.

Swap Ratio

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