Jan. 4 (Bloomberg) -- Reliance Industries Ltd., the Indian company seeking to buy LyondellBasell Industries AF, said it raised 26.8 billion rupees ($576 million) selling shares.
India’s largest company by market value sold 25.9 million shares at an average price of 1,035 rupees apiece, Reliance said in a statement to the Bombay Stock Exchange today. Life Insurance Corp. of India bought 25 million shares, a person familiar with the matter said.
The sale, the second such transaction by Reliance in less than four months, was at a 5 percent discount to the stock’s Dec. 31 closing price. Reliance’s Petroleum Trust unit raised $664 million selling shares to investors on Sept. 17.
“It is difficult to sell such large volumes of shares at market prices so the discount is not unusual,” said Apurva Shah, head of research at Prabhudas Lilladher Pvt. in Mumbai. “With a possible LyondellBasell deal around the corner, Reliance could be raising money for the purchase.”
Shares of Reliance Industries fell 1.4 percent, the most in two weeks, to 1,075.50 rupees in Mumbai trading. The benchmark Sensitive Index gained 0.5 percent. The stock rose 77 percent last year.
Lyondell Chemical Co. filed a plan to reorganize with the U.S. Bankruptcy Court last month as it evaluates an offer from Reliance, pitting the Indian company against lenders in a battle for the bankrupt chemical maker.
Reliance may pay as much as $12 billion for a controlling stake, Victor Shum, a Singapore-based senior principal at energy consultant Purvin & Gertz Inc., said in November when Reliance announced it made a non-binding all-cash bid to acquire LyondellBasell. The Mumbai-company hasn’t made details of its bid public.
Treasury Stock
Reliance created so-called treasury stock in 2002 when it merged with unit Reliance Petroleum Ltd., which constructed its first 660,000 barrel-a-day crude oil refinery at Jamnagar in Gujarat state. The company had 368 million such shares before today’s sale, K.R. Choksey Shares & Securities Pvt. said in a note.
Reliance has $4.65 billion of cash and cash equivalent and $7.9 billion in treasury stock, according to K.R. Choksey.
Life Insurance Corp. is the largest institutional shareholder in Reliance with a 6.07 percent stake as of Sept. 30, according to data compiled by Bloomberg.
Citigroup Inc. and Morgan Stanley managed the stock sale, according to Bloomberg data.
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