New Delhi: Reliance Industries has made a big announcement. Reliance has announced the demerger of the O2C business. Actually RIL is going to create a separate company for its oil and chemical business. A new subsidiary will be formed for the company’s oil and gas business. These will include businesses such as petrochemical, gas, fuel retailing. Explain that the company said the demerger will help in finding new opportunities in the O2C business. This demerger will help bring in investors like Saudi Aramco. Along with this, it will also help in finding new opportunities in the O2C business.
Reliance Industries separates oil to chemical business
This demerger is expected to get all clearances by the second quarter of FY 2022. RIL will provide loan to this new subsidiary for 10 years. The company will be given a loan of $ 25 billion to the new subsidiary. With this loan, the subsidiary will buy the O2C business. However, loan to O2C business will remain with RIL. Reliance Industries Limited today said on Tuesday 23 February that the company will create an independent and new subsidiary of its oil to chemical business but at the same time the company said that the company will have 100 percent management control of this new subsidiary.
Business will increase growth
RIL has said in a notification to the exchanges that the promoter group will hold 49.14 per cent stake in the O2C business even after reorganization and the process will have no consequences on the company’s stake. Morgan Stanley has given an overweight rating on RIL and has fixed the target at Rs 2252. With Demerger, the company will have 4 growth businesses. The company’s digital, retail, new energy business will grow. At the same time, growth will be supported by the new material business. With this, the market is seeing value in digital and retail.
Started the separation work last year
Reliance began last year to transfer the O2C business to a separate entity to sell potential stakes to companies such as Saudi Aramco. In July 2019, Ambani said that a separate subsidiary in the process of separating O2C would be completed by early 2021. Reliance owns two oil refineries at Jamnagar in Gujarat with a combined capacity of 68.2 million tonnes per annum. The company holds a 66.6% stake in the KG-D6 block where it is investing around USD 5 billion in developing a second set of gas discoveries with BP.
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