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Nov. 10 (Bloomberg) -- India’s billionaire Ambani brothers said they haven’t reached an out-of-court settlement of their dispute over natural gas supplies from the country’s biggest field, denying a report of a compromise.
Reliance Industries Ltd., controlled by Mukesh Ambani, said in a statement today it is “not open” to a settlement and called the report “untrue and baseless.” Anil Ambani’sReliance Natural Resources Ltd. told the Bombay Stock Exchange that rumors of a resolution are “baseless and speculative.”
Anil Ambani is fighting a lawsuit in India’s Supreme Court to enforce a 2005 family agreement to buy gas from Reliance Industries at 44 percent less than a government-approved price. The Ambani family, including brothers Mukesh and Anil, met in Mumbai on Nov. 7 to discuss ending the dispute, Daily News & Analysis reported, citing unidentified investment bankers.
“Everyone would be delighted if they settled,” said Homi Phiroze Ranina, a Supreme Court lawyer. An out-of-court resolution would allow the family to keep details of their 2005 accord confidential, while the judges would not be forced to determine the legal validity of a private agreement, he said.
The Supreme Court in New Delhi started hearings in the lawsuit on Oct. 20. The arguments started afresh on Nov. 5 after Justice B. Sudershan Reddy replaced R.V. Raveendran on the three-judge panel. Raveendran stepped down after six days of arguments, citing a potential conflict of interest.
Reliance Natural gained 1.7 percent to 73.40 rupees in Mumbai trading. Reliance Industries rose 1.5 percent compared with a 0.4 percent fall in the benchmark Sensitive Index.
Compromise Price
A compromise that may be reached would allow Anil Ambani’s companies to buy the gas at $3.60 per million British thermal units, Daily News said. The price is 14.3 percent less that the rate set by the government and 54 percent higher than that sought by the Anil Ambani group, according to the report.
Reliance Industries has said the gas can’t be sold for less than $4.20 per mBtu that the government approved in 2007. Production from the field started in April and the gas is being sold to customers, including power and fertilizer producers, selected by the government.
Current gas output at the KG-D6 field is 45 million to 46 million cubic meters a day, P.M.S. Prasad, president for the oil and gas business at Reliance Industries, told reporters in New Delhi today. At the peak rate of 80 million cubic meters a day, production from the field will double the availability of the cleaner-burning fuel in the country.