Reliance Industries Ltd said it is withdrawing its application before the National Company Law Tribunal (NCLT) for the separation of its oil-to-chemical (O2C) business in view of its foray into the new energy sector in the last few months.
In a statement on Friday, the Indian firm also said it is reneging on its proposed $15 billion deal to sell a 20 per cent stake in its oil refinery and petrochemical business to Saudi Aramco. Both the firms have agreed to re-evaluate the proposed investment in view of Reliance entering the new energy business.
The stake sale talks, which first surfaced officially in August 2019, are being reset in the light of Reliance entering new energy business in recent months by investing $10 billion in alternative energy over three years . To move towards green energy, it has already bought a German manufacturer of photovoltaic solar wafers and signed an agreement 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 reevaluate the proposed investment in the O2C business,” 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 Reliance’s O2C business”.
“In the last two years, both the teams put in significant efforts in the process of due diligence, despite the COVID restrictions. This has been possible because of the mutual respect and long standing relationship between the two organisations.”
Reliance recently unveiled its plans for new energy and materials businesses by announcing the development of the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar. The company said it would be one of the world’s largest integrated renewable energy manufacturing facilities.
The complex includes an integrated solar photovoltaic module factory for the production of solar power, an advanced energy storage battery factory for the storage of intermittent energy, an electrolyser factory for the production of green hydrogen, and for converting hydrogen into inductive and stationary power. A fuel cell factory would be involved. in Jamnagar. It forms a major part of O2C assets and is envisaged to be the hub of Reliance’s new businesses in renewable energy and new materials.
Referring to the withdrawal of NCLT’s application, Reliance assured that its relationship with Saudi Aramco was “deep and mutually beneficial”, and that the two companies are “deeply committed to building a win-win partnership”. “.
“RIL will continue to be Saudi Aramco’s preferred partner for private sector investment” India and will collaborate with Saudi Aramco and SABIC for investment in Saudi Arabia. Saudi Aramco and RIL share a very deep, strong and mutually beneficial relationship, which has been developed and nurtured by both companies over the past 25 years. Both the companies are committed to cooperate and work towards further strengthening the relationship in the years to come.”
(with PTI inputs)
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