MUMBAI: Reliance Industries Ltd (RIL) today said that it has secured approval of its shareholders and creditors for hiving off its oil-to-chemical (O2C) business into a separate independent unit.

In stock exchange filings, RIL said, as per the directions of the National Company Law Tribunal (NCLT) Mumbai dated February 11, 2021 the company had called the meetings of equity shareholders, lenders and unsecured creditors for considering a resolution for transferring the O2C business into a separate subsidiary to be called Reliance O2C Ltd (Reliance O2C). 

The meetings held on Wednesday, March 31, 2021 through video conferencing were chaired by former Supreme Court judge Justice (Retd) BN Srikrishna during which 100 per cent of the secured creditors voted in favour of the resolution, while 99.99 per cent of unsecured creditors cast their vote in favour of the resolutions.

In February, RIL had announced the contours of spinning off its oil refining, fuel marketing and petrochemical (oil-to-chemical) business into an independent unit with a US $25 billion loans from the parent, as it looked to unlock value by settling stakes to global investors like Saudi Aramco.

According to a company presentation, the hiving out of Reliance O2C will enable the focused pursuit of opportunities across the oil-to-chemicals value chain, improve efficiencies through self-sustaining capital structure and a dedicated management team, and attract dedicated pools of investor capital, 

The transfer of twin refineries at Jamnagar in Gujarat, petrochemical sites in multiple states, and a 51 per cent stake in the fuel retailing business to O2C will be on a ‘slump sale basis’, subject to requisite approvals that are expected to come in by September.

However, upstream oil and gas producing fields such as KG-D6 and the textile business will not form part of the new unit, where it aims to maintain a significant majority stake. The retail business is held in Reliance Retail Ventures Ltd and telecom and digital ventures are nested in Jio Platforms Ltd.