Mukesh-led RIL not to foray into gas-based power generation till 2022
Bringing down the curtain on one of the most acrimonious battles of post-Independence corporate India and seeking to erase the bad memories of the tightly fought court battles, the Ambani brothers — Mukesh and Anil — on Sunday decided to end the sharp differences and create an environment of harmony, cooperation and collaboration between their groups.
It was decided that the Mukesh Ambani-owned Reliance Industries Limited (RIL) will not enter the gas-based power generation business till March 2022.
Both companies would open negotiations to finalise the agreement for gas sale to Anil Ambani's Reliance Natural Resources Limited (RNRL).
Non-compete pacts to be cancelled
In a development that has surprised many but ended the era of uncertainty and bad blood, both groups decided to move forward.
They decided to cancel all existing non-compete agreements between the two groups executed in January 2006, through a memorandum of understanding.
The agreement, which is bound to bring relief to the corporate world and also in government circles, comes within a few days of the Supreme Court declining to give any relief to Mr. Anil Ambani in the gas dispute and directing the brothers to resolve their differences over gas pricing within six weeks.
“A new, simpler non-compete agreement executed limited to gas-based power generation. RIL and RNRL will expeditiously negotiate a gas supply arrangement as per the Supreme Court order and hope to conclude negotiations very soon,” said a statement issued by the Anil group.
The cancellation of the non-compete agreement would provide both groups enhanced operational and financial flexibility and greater ability to participate in high growth sectors such as oil and gas, petrochemical, telecom, power and financial services, the statement said.
In an identical statement, RIL said:
“RIL, led by Mukesh Ambani, and the Reliance Anil Dhirubhai Ambani Group companies, Reliance Communications, Reliance Infrastructure, Reliance Natural Resources and Reliance Capital, led by Anil Ambani, on Sunday approved and signed an agreement cancelling all existing non-compete arrangements entered into between the two groups in January 2006 pursuant to the scheme of re-organisation of the Reliance Group, and entered into a new simpler, non-compete agreement with respect to only gas-based power generation.
“These developments will eliminate any room for further disputes between the two groups on matters relating to the scope and interpretation of the non-compete obligations,” the RIL added.
“RIL and RNRL will expeditiously negotiate gas supply arrangements in accordance with the orders of the Supreme Court. We hope to conclude these negotiations very soon,” the RIL statement said.