Reliance Industries (RIL) is in the process of carving out its oil-to-chemical (O2C) business into a separate new subsidiary with a $25-billion loan from the parent. The move is directed towards unlocking value in the business with a possible stake sale and embarking on the next level of investment cycle with a focus on clean energy. With approvals from Sebi and stock exchanges in place, RIL will seek a nod from shareholders and creditors in the first quarter of the next financial year.
RIL proposes to transfer all its refining, petrochemicals and marketing assets to the O2C entity, which includes the 51:49 fuel marketing joint venture with BP, 74.9% elastomer JV with Sibur, Recron/RP Chemicals Malaysia, trading subsidiaries, ethane pipeline and all other related assets. The O2C scheme becomes effective with appointed date of January 1, 2021.
The company will transfer $40 billion of long-term assets, $2 billion of net working capital and $5 billion of non-current liabilities to the O2C entity for a consideration of $25 billion of long-dated loan and $12 billion of equity from RIL, it said in a presentation. RIL expects the separation to be completed by September.
