Reliance gets shareholders’, creditors’ approval for hiving off O2C biz

• Hundred percent of the secured creditors voted in favour of the resolution, and 99.99 percent of unsecured creditors cast their vote in favour of the resolution

• Reliance expects the demerger process to be completed by the second quarter of FY22

New Delhi: Reliance Industries Ltd (RIL) said on Friday that it has received an approval from its shareholders and creditors for hiving off its O2C (Oil-to-Chemicals) business into a separate entity. "Scheme of Arrangement between Reliance Industries Limited ("Transferor Company" or "Company") & its shareholders and creditors and Reliance O2C Limited ("Transferee Company") & its shareholders and creditors ("Scheme") was placed before the Equity Shareholders for consideration and approval," Reliance Industries said.

Hundred percent of the secured creditors voted in favour of the resolution, and 99.99 percent of unsecured creditors cast their vote in favour of the resolution for the hiving off of Reliance Industries' O2C business.

Reliance to finish carving out O2C biz by Q2 of FY22

Reliance Industries initiated the process of carving-out its O2C business and turning it into an independent subsidiary in February. It expects the process to be completed by the second quarter of FY22. The demerger has been on the cards for a while now and will allow the Mukesh Ambani-led company to attract global investment in its O2C business. The demerger will also facilitate the entry of Saudi Aramco, which plans to pick up 20 percent stake in the O2C business. RIL is already in talks with Saudi Aramco for one of the largest downstream transactions in India.

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Reliance Industries has said that an independent company will allow focused pursuit of opportunities across O2C value chain, enhance efficiency through self-sustaining capital structure and dedicated management team, facilitate creation through strategic partnerships and attract dedicated pools of investor capital. RIL has sought an approval from its shareholders and creditors for the process.

'Spin-off of O2C business will be beneficial to all RIL stakeholders'

While stating that the creation of a 100 percent owned subsidiary called Reliance O2C Limited will be beneficial to all stakeholders, RIL said that the management control of the company will rest with Reliance Industries. The existing O2C operating team will move with the transfer of business and there will be no dilution of earnings or any restriction on cash flows, said RIL. The oil-to-chemical subsidiary will have all of RIL's refining, marketing and petchem assets — including the world's largest refining complex at Jamnagar and global-scale petrochemical units. However, upstream oil and gas producing assets will not be part of the subsidiary.

RIL has said that the promoter group will continue to hold 49.14 percent stake in the O2C business after the reorganisation and therefore the shareholding pattern of the company will not change.

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