Reliance, owned by billionaire Mukesh Ambani, will retain full control of the company after the restructuring, the company said in the presentation.
Reliance Industries has announced plans to split its petroleum-chemicals (O2C) business into an independent unit with a $ 25 billion loan from parent company as it seeks to unlock value by selling stakes to global investors such as Saudi Aramco. .
The reorganization “will enable the targeted pursuit of opportunities throughout the O2C value chain, improve efficiency through an autonomous capital structure and a dedicated management team, and attract dedicated investor capital pools”, according to a presentation of the company filed with the stock exchanges.
The O2C business owns the oil and petrochemicals refinery assets of Reliance and the fuel retail business. Following the spin-off, Reliance Industries Ltd (RIL) will only house upstream oil and gas exploration and production activities, including the KG-D6 block, and financial services, group treasury and operations. traditional textiles, and will act as a holding company. of the group. The retail business is owned in Reliance Retail Ventures and the telecommunications and digital companies are nested in the Jio platforms.
The assets of the 100% -owned O2C unit will be financed by the interest-bearing loan, which will be an “efficient upstream cash flow mechanism, including any capital inflows,” in the unit, the company said. .
The 10-year loan to the newly created branch is intended for the purchase of the assets of the O2C companies and has a variable interest rate.
In August 2019, RIL agreed to upstream 1.08 lakh crore of Jio’s debt to free up his telecommunications company, before inducting investors such as Facebook, Google and KKR. As of December 2020, RIL’s gross debt was 2.57 lakh crore.
RIL started working on the separation of the O2C unit last year. He values the O2C activity at $ 75 billion and is in talks with Saudi Aramco for the sale of 20% of the capital.
The necessary approvals for the split are expected by the second quarter of the next fiscal year.