Reliance Industries (RIL) has announced that it will demerge its oil-to-chemicals (O2C) business into a wholly-owned subsidiary. In a late night stock exchange filing, the market heavyweight said that it will continue to hold 100 per cent control of the new entity.


In its statement, the country’s largest company in terms of market value said that this new spin-off will not result in any change in the company’s shareholding and that the promoter group will continue to hold a 49.14 per cent stake in the O2C business after the reorganisation.

The existing O2C operating team will be moving with the transfer of business and there will be no dilution of earnings or any restriction on cash flows.

“Reorganization of O2C Business facilitates participation by strategic investors and marquee sector focused investors,” the company said.

The latest move by the conglomerate follows its negotiations for a planned stake sale in O2C business to Saudi Aramco, which has not progressed as per original timelines due to the COVID-19 outbreak.

In July last year, RIL Chairman and Managing Director Mukesh Ambani had said that the deal with Saudi Aramco didn’t progress as per the original timeline due to unforeseen situations in the energy market and COVID-19 situation.

In August, Saudi Aramco had said it’s still working on a deal to buy a $15 billion stake in RIL’s refining and chemicals business.

RIL will also provide an interest-bearing loan of $25 billion to the O2C business. The O2C will pay floating rate interest linked to 1-year SBI MCLR rate.

The conglomerate said that it has already received a nod from market regulator Securities and Exchange Board of India (SEBI) and stock exchanges for the O2C subsidiary. But it further needs approvals from the equity shareholders and creditors, regulatory authorities and income tax authority and National Company Law Tribunal (NCLT) benches in Mumbai and Ahmedabad.