Reliance Industries Ltd (RIL) has announced on M that it has begun a process to move its oil-to-chemicals (O2C) business to an independent subsidiary and will retain 100 percent regulatory control.
All refinancing, marketing and petrochemical assets will be transferred to the O2C subsidiary, he said in regulatory films at stock exchanges late Monday.
Oil-to-chemicals added more than 60% in the last financial year to the group’s revenues which have recently been pushing toward consumer industries such as technology and sales. Dividing the industry will make it easier for Ambani to attract investors and help accelerate the sale of bets proposed to Saudi Arabian Oil Co.
“With this reorganization, RIL will have four growth engines – digital, retail, new products and new energy,” Morgan Stanley Mayankan analyst Maheshwari wrote in a note on 23 February.
“RIL’s split of its O2C business into a subsidiary will help sell a potential bet to Aramco, possibly enabling another reduction in its net debt,” said Sweta Patodia, an analyst at Moody’s Investor Service. .
“Until the bet sale is completed, there will be no risk of subordination to RIL lenders, as the company will have full access to O2C’s business cash flows, as they are fully owned and free of debt. outside the new subgroup, “she added.
The move will help create value through strategic partnerships, including the agreement with Saudi Aramco, and will attract specific pools of investment capital.