Moneylife learns that the ADA group in fact negotiated a substantial extension of 12 years to the non-compete agreement on gas-based power projects. So it is ‘Advantage Anil’ on this deal.

Recent media reports suggest that Reliance Industries Ltd, led by Mukesh Ambani, and Reliance ADA group companies, led by Anil Ambani, have cancelled their earlier non-compete agreement relating to all businesses except gas-based power plants. Moneylife now learns that the ADA group has, in fact, negotiated a substantial extension of 12 years to the non-compete agreement on gas-based power projects. So, in effect, it is ‘Advantage Anil’ on this deal.
 
The original non-compete agreement signed between RIL and ADA group in January 2006 was for a period of ten years starting from 2006. In other words, after 2016, both Mukesh and Anil Ambani were free to enter into each other’s territories.

According to industry experts and sources close to the developments from both groups, Anil Ambani has taken mileage out of the new deal by extending the non-compete clause for all of his ambitious gas-based power plants, including Dadri.
 
According to the new agreement, Reliance Natural Resources Ltd (RNRL) will get uninterrupted gas supply for 12 more years (until 2022), at $4.2 per million metric British thermal units (mmBtu). 

In addition, during this period, the Mukesh Ambani group cannot bid for power projects based on gas, even though it has ample supply of natural gas at its disposal. The senior Ambani can bid for ultra-mega power projects provided they are not fired by gas.

According a release issued by both groups, the cancellation of the existing non-compete agreement will provide enhanced operational and financial flexibility to both groups, and greater ability to participate in high-growth sectors of the Indian economy, such as oil and gas, petrochemicals, telecommunications, power, and financial services.

However, both Ambani brothers cannot use the Reliance brand name in sectors opened up to either by the revocation of the non-compete agreement.  — Moneylife Digital Team