New Delhi: Billionaire Mukesh Ambani’s Reliance Industries Ltd said on Friday that it had obtained approval from its shareholders and creditors to put its oil-to-chemical (O2C) business into a separate entity. Under the terms of the National Company Law Tribunal (NCLT), the company convened meetings of shareholders, lenders and unsecured creditors to consider a decision to transfer the O2C business to a separate subsidiary – Reliance O2C Limited.
RIL said that 99.99 percent of the shareholders, who participated in video meetings at the meeting, voted in favor of the resolution. While 100 percent of the insured creditors voted in favor of the resolution, 99.99 percent of the unsecured creditors voted in favor of the resolution. The chair was chaired by former Supreme Court Judge Justice (Retd) BN Srikrishna.
The arrangement scheme between Reliance Industries Limited (transfer company) and its shareholders and creditors and Reliance O2C Limited (Transferee Company) and its shareholders and creditors has been placed before the shareholders, secured and unsecured creditors for consideration and approval. Shareholders and lenders vote electronically.
In February, RIL announced the contours to eliminate its oil refining, fuel marketing and petrochemical (oil-to-chemical) business in an independent unit with a $ 25 billion loan from the parent, as it seemed to unlock value by settling interests with global investors such as Saudi Aramco. The cut-out of Reliance O2C Limited (O2C) will enable the focused pursuit of opportunities in the oil-to-chemicals value chain, improve efficiency through self-sustaining capital structure and a dedicated management team, and according to the addition of dedicated pool of investment capital , to a company presentation.
The transfer of two refineries at Jamnagar in Gujarat, petrochemical sites in several states, and a 51 percent stake in the retail fuel business to O2C will take place on a ‘slump’, subject to the necessary approvals expected to come in September. However, upstream oil and gas producing fields such as KG-D6 and the textile industry will not form part of the new unit, where it intends to retain a significant majority share.
The consideration for the transfer will be in the form of $ 25 billion long-term interest-bearing debt issued by O2C to Reliance Industries Ltd (RIL). It is proposed that RIL’s foreign debt remain with RIL only. Once completed, RIL – the company founded by Dhirubhai Ambani in the late 1960s – will house only the oil and gas extraction and production business, financial services, group treasury and old-fashioned textile businesses and act as a group holding company.
The retail business is held in Reliance Retail Ventures Ltd and telecommunications and digital businesses are in Jio Platforms Ltd. genestel. Long-term loans issued by O2C to RIL, as part of the reorganization, will provide an effective mechanism to streamline cash flow flowing from O2C to RIL, the presentation said. RIL was in ongoing talks with the Saudi oil company (Saudi-Aramco) to sell a 20 percent minority stake in its O2C businesses, which, if successful, would lead to a further reduction of the company.
Trust extends deadline to complete Future agreement
Reliance Retail Ventures, the retail arm of Reliance Industries, has extended the timeline by six months to buy its 24,713 million crore deal with the future group led by Kishore Biyani to buy its retail and wholesale business. Reliance Retail Ventures Ltd (RRVL) has extended the timeline for the “Long Stop Date” from March 31, 2021 to September 30, 2021, according to a regulatory filing by Future Retail.
“In terms of the provisions of the scheme and other transaction documents executed in this regard, RRVL granted the right to do so, extending the timeline for ‘Long Stop Date’ from 31 March 2021 to 30 September 2021 which has been duly recognized. by Reliance Retail and Fashion Lifestyle Limited, a wholly owned subsidiary of RRVL, ”it is said. Long Stop, an established practice in merger and acquisition transactions, is a time frame in which parties agree that all the conditions for a transaction must be met and the transaction must be completed.
The deal, which is being contested by Amazon, is facing legal hurdles and a Supreme Court ruling pending the petition filed by the e-commerce chief. The Future-Reliance agreement, announced on 29 August 2020, has already received approval from regulators such as CCI, SEBI and stock exchanges, and the scheme of arrangement is now awaiting the nod of the NCLT and shareholders.
Although the Supreme Court gave the National Company Law Tribunal (NCLT) permission for his proceedings, but asked him not to give any final order approving the scheme. The NCLT reserved its order on the scheme of arrangement in which all of the Future Group’s retail assets under Future Enterprises Ltd would be consolidated and then transferred to RRVL through sale.
Last month, a single Delhi Supreme Court bank ordered the Future Group to stay the deal. However, it was disputed by the Future Group before the Divisional Bank of the High Court in Delhi, which remained the order of the bank for some members. Amazon and Future have been embroiled in a bitter legal battle after US e-commerce giant dragged Future Group into arbitration at the Singapore International Arbitration Center (SIAC), arguing that the latter had breached their contract by entering into an agreement with rival Reliance close.
Source: Telangana Today