Reliance, Saudi Aramco to re-evaluate proposed investment in O2C business

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Mumbai/IBNS: Reliance Industries Ltd and Saudi Aramco have mutually decided to re-evaluate the latter’s proposed investment in the oil-to-chemicals (O2C) business of the Indian conglomerate.

In a statement, RIL said both the companies have felt that re-evaluation would be “beneficial” and the decision has been made “in light of the changed context”.

The current application with NCLT for segregating the O2C business from RIL is being withdrawn, the company said in a late evening exchange filing on November 19.

A statement released by Reliance read: “Due to 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. Consequently, the current application with NCLT for segregating the O2C business from RIL is being withdrawn.”

RIL and Saudi Aramco signed a non-binding Letter of Intent in August 2019 for a potential 20 percent stake acquisition by Saudi Aramco in the O2C business of Reliance.

Separating the O2C business from RIL would have paved the way for stake sale in the new company to Saudi Aramco.

RIL said it shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco and its chemical manufacturing wing SABIC for investments in Saudi Arabia.

Apparently, the re-evalution of stake sale to Saudi Aramco comes as Reliance plans for the new energy business, following its investments in alternative energy.

”Reliance recently unveiled its plans for the New Energy & Materials businesses by announcing the development of Dhirubhai Ambani Green Energy Giga Complex at Jamnagar. It will be amongst the largest integrated renewable energy manufacturing facilities in the world,” said the company in its statement.

The four Giga factories – which will be a part of the complex, will include a fuel cell factory, an integrated solar photovoltaic module factory, an electrolyser factory, and an energy storage battery factory, Reliance said.

Jamnagar – which accounts for a major part of the O2C assets, is likely to be the center for Reliance’s new businesses of renewable energy and new materials, supporting the net-zero commitment.