Reliance Industries seeks a new legacy for an old warhorse
Reliance Industries’ move to carve out a separate unit for its oil to chemicals (O2C) empire could help draw strategic and financial investors to a future alternative-energy revenue stream, with India’s most valuable company seeking to replicate its monetisation playbook for consumer sectors to unlock value in the legacy businesses.
The proposed financial details of the carve-out are as follows. RIL NSE 1.14 % on a standalone basis will transfer $40 billion (approximately ₹2.9 lakh crore) of long-term assets and $2 billion (₹14,500 crore) of net working capital to the O2C entity for a $25-billion (₹1.8 lakh crore) floating-rate loan linked to one-year SBI MCLR rate and $12 billion (₹87,000 crore) of equity. The arrangement will be tax neutral and not impact RIL’s consolidated cash flow, keeping its credit rating intact.
