RNRL MERGE WITH R-POWER

 The boards of Anil Ambani-led Reliance Power (Rel-Power) and Reliance Natural Resources (RNRL (RNRL.NS : 63.95 -1)) will meet on Sunday to consider merging with each other.
Television reports on Friday said the merger will facilitate the routing of gas from Mukesh Ambani's Reliance Industries (RELIANCE.NS : 1068.95 -7.3) (RIL) to Rel-Power's power plants, including the one proposed at Dadri.
RNRL was formed with an intent to source, supply and transport gas, coal and liquid fuels. It lost much of its relevance without any surety of supply of gas, according to the family agreement between the Ambani brothers. In fact, there was much speculation that Mukesh would try to acquire RNRL from Anil.
RNRL's case to remain a separate entity weakened further this May, when the Supreme Court passed a decision that put an end to the feud between Anil and Mukesh over pricing of RIL's gas supply to RNRL.
The SC said that no private arrangement like the MoU drafted by the brothers on sharing of the gas from the D6 KG basin gas can override government policy, thus establishing the validity of the $4.20 per mmBtu price set by a group of ministers and contested by RNRL as too high.
A majority of the three-member bench headed by the then Chief Justice KG Balakrishnan also said the MoU for separation of family business was not legally binding on RIL. The court asked the brothers to renegotiate a fresh deal for gas supply to RNRL at RIL's initiative within 14 weeks. The court said the agreement should be based on the fact that government is the owner of the gas and hence, has the last word on its pricing and utilisation.
The brothers then scrapped a non-compete agreement. Last week, they signed a revised gas supply agreement, a development that paved the way for the government to allocate gas to Anil Ambani group's power plants. RIL had said the revised agreement is compliant with the gas utilisation policy and EGoM decisions.
At the recent RIL AGM, Mukesh hailed the Supreme Court judgment and said: "As and when the power plants of ADAG are ready to receive gas, we would commence supplies to them, subject to government granting allocations to these plants in the same manner as we do to all other plants to whom the government has allocated gas from the KG-D6 gas field