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RIL share price rises 5% on transfer of gasification undertaking to its subsidiary

The appointed date of the Scheme would be March 31, 2022 or such other date as may be determined by the board.

November 25, 2021 / 12:24 PM IST
 
 
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Reliance Industries (RIL) share price rose more than 5 percent to Rs 2,481.90 intraday on November 25 after the company board decided to implement a scheme of arrangement to transfer Gasification Undertaking into a wholly-owned subsidiary (WOS).

"Reliance Industries' board on November 24 announced that it has decided to implement a scheme of arrangement (Scheme) to transfer Gasification Undertaking into a wholly-owned subsidiary (WOS)," company said in its press release.

The board has decided to implement a scheme of arrangement between Reliance Industries and its shareholders and creditors; and Reliance Syngas (RSL) and its shareholders and creditors.

RSL is a wholly-owned subsidiary of Reliance Industries.

RIL has invested Rs 10,00,000 in cash in 100,000 equity shares of Rs 10 each of RSL.

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"The Gasification project at Jamnagar was set up with the objective to produce syngas to meet the energy requirements as refinery off-gases, which earlier served as fuel, were repurposed into feedstock for the Refinery Off Gas Cracker (ROGC)," company said.

"This enables production of olefins at competitive capital and operating costs. Syngas as a fuel ensures reliability of supply and helps reduce volatility in energy costs. Syngas is also used to produce Hydrogen for consumption in the Jamnagar refinery," it added.

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Repurposing the gasification assets will help use of syngas as a reliable source of feedstock to produce chemicals and cater to growing domestic demand, resulting in an attractive business opportunity. Further, as the hydrogen economy expands, RIL will be well-positioned to be the first mover to establish a hydrogen ecosystem, the statement added.

The Scheme will also enable RIL to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving the induction of investors in the gasifier subsidiary and capturing value of upgradation in RIL through partnerships in different chemical streams.

The board has accordingly approved a scheme to transfer the Gasification Undertaking as a going concern on slump sale basis for a lump sum consideration equal to the carrying value as on the appointed date.

The appointed date of the Scheme would be March 31, 2022 or such other date as may be determined by the board.

The scheme will require approval of stock exchanges, creditors, shareholders, NCLT and other regulatory authorities.

At 12:22 hrs Reliance Industries was quoting at Rs 2,476.80, up Rs 125.90, or 5.36 percent on the BSE.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Moneycontrol News
first published: Nov 25, 2021 09:36 am

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