Reliance Industries Ltd said it was withdrawing its application before National Company Law Tribunal (NCLT) for the segregation of its oil-to-chemical (O2C) business in the wake of its foray into the new energy sector over the past few months.
In a statement on Friday, the Indian firm also said it was rebooting its proposed $15 billion deal to sell 20 per cent stake in its oil refinery and petrochemical business to Saudi Aramco. The two firms have agreed to re-evaluate the proposed investment in the wake of Reliance entering the new energy business.
The stake sale talks, which were first officially revealed in August 2019, are being reset in light of Reliance making forays into new energy business in recent months by investing $10 billion in alternative energy over three years. To pivot to green energy, it has already bought a German maker of photovoltaic solar wafers and signed a deal with a Danish company to manufacture hydrogen electrolysers in India.
“Due to the evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context,” Reliance said in a statement.
In a press release issued on Friday, the company said it had signed a “non-binding letter of intent in August 2019 for a potential 20% stake acquisition by Saudi Aramco in the O2C Business of Reliance”.
“Over the past two years, both the teams made significant efforts in the process of due diligence, despite Covid restrictions. This has been possible due to the mutual respect and long-standing relationship between the two organisations,” read the press release.
Reliance recently unveiled its plans for the new energy and materials businesses by announcing the development of Dhirubhai Ambani Green Energy Giga Complex at Jamnagar. It will be among the largest integrated renewable energy manufacturing facilities in the world, the company said.
The complex will include an integrated solar photovoltaic module factory for production of solar energy, an advanced energy storage battery factory for storage of intermittent energy, an electrolyser factory for production of green hydrogen, and a fuel cell factory for converting hydrogen into motive and stationary power in Jamnagar. This accounts for a major part of the O2C assets and is envisaged to be the centre of Reliance’s new businesses of renewable energy and new materials.
Referring to the NCLT application being withdrawn, Reliance assured that its relationship with Saudi Aramco was “deep and mutually beneficial”, and that the two companies “deeply committed to creating a win-win partnership”.
“RIL shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco and SABIC for investments in Saudi Arabia. Saudi Aramco and RIL have a very deep, strong and mutually beneficial relationship, that has been developed and nurtured by both companies over the last 25 years. Both companies are committed to collaborate and work towards strengthening the relationship further in the years ahead,” Reliance said.
(With PTI inputs)
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