Published On:November 25 2021
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Reliance to transfer gasification unit to subsidiary.

Reliance Industries Ltd. has decided to transfer its gasification unit to its newly created subsidiary Reliance Syngas Limited (RSL) on a slump sale basis.

RSL is a company incorporated under the Companies Act, 2013 on November 1, 2021. RIL has invested ₹10,00,000 in cash in 1,00,000 equity shares of ₹10 each of RSL.

RSL is a wholly-owned subsidiary of the company. The equity shares of RSL are not listed on any Stock Exchanges and the company is yet to commence its business operations.

The Appointed Date of the Scheme of Arrangement would be March 31, 2022, or such other date as may be determined by the board of directors of the Company and RSL.

The Gasification Undertaking produces syngas to meet the energy requirements at Jamnagar as refinery off-gases that earlier served as fuel were repurposed into feedstock for the Refinery Off Gas Cracker (ROGC). This enables the production of olefin 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.

RIL targets to have a portfolio that is fully recyclable, sustainable, and net carbon zero. This will be achieved by transitioning to high-value materials and chemicals with renewables as the source of meeting its energy requirements.

As RIL progressively transitions to renewables as its primary source of energy, more syngas will become available for up-gradation to high-value chemicals including C1 chemicals and Hydrogen. Further, the carbon dioxide released during the producing Hydrogen is highly concentrated and easy to capture, substantially reducing the cost of carbon capture. Overall, these steps will help sharply reduce the carbon footprint of the Jamnagar complex.

"India is a high growth market and is expected to continue to see a deficit of these high-value chemicals in the foreseeable future. Repurposing the gasification assets will help use syngas as a reliable source of feedstock to produce these 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," RIL said in a stock exchange filing.

"With optionality in applications for syngas, the nature of risk and returns associated with the Gasification Business will likely be distinct from those of the other businesses of RIL. This distinct business profile also provides the opportunity to potentially attract a different pool of investors and strategic partners for the Gasification Business and new materials and chemicals projects," it added.

"Accordingly, the Scheme is being proposed for transfer of the Gasification Undertaking to RSL as a going concern on slump sale basis. No shares are proposed to be issued pursuant to the Scheme. Therefore, there will be no change in the shareholding patterns of the Company and RSL. Further, RSL is not seeking listing of its shares and will continue to be an unlisted company," RIL said in a stock exchange filing.


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