In a major announcement, Reliance Industries on Tuesday announced the firm has started up the process of carving out O2C (oil-to-chemical) business into an independent subsidiary. In the line of announcement made by the firm led by Mukesh Ambani, Reliance’s new oil-to-chemicals operation into an independent unit with a $25 billion loan from the parent.
The notification, issued late night on February 23, seeks shareholder and creditors’ approval on the company’s plan to demerge its O2C business. According to the release, the reason behind the demerger is to enable the focused approach towards opportunities across the O2C value chain.
The oil-to-telecom conglomerate will transfer all refining, marketing and petchem assets to O2C. RIL standalone entity will have all existing segments other than O2C business. Reliance Industries has the country’s largest petrochemical manufacturer with units at Jamnagar, Dahej, Hazira, Nagothane, Vadodara, Patalganga, Silvassa, Barabanki, and Hoshiarpur.
Industry experts believe the demerger was announced in the run-up to negotiations with Saudi oil giant Aramco, which are being pursued again after a pause due to the Covid-19 pandemic last year.