Reliance and Aramco Shelve O2C Investment Plan
Reliance Industries and Saudi Aramco have mutually agreed to shelve plans for the latter to take a stake in the Indian company’s oil-to-chemicals (O2C) business. Reliance is now withdrawing its application with India’s National Company Law Tribunal to spin off the O2C business in preparation for the deal.
The decision comes after Reliance unveiled plans in June to develop the Dhirubhai Ambani Green Energy Giga complex at Jamnagar, which it said will be one of the largest integrated renewable energy manufacturing facilities in the world.
The complex will include an integrated solar photovoltaic module factory for producing solar energy, an advanced energy storage battery plant for storing intermittent energy, an electrolyzer to produce green hydrogen, and a fuel-cell facility for converting hydrogen into motive and stationary power.
Because of the evolving nature of its business portfolio, Reliance said the companies have determined that it would be beneficial for them to re-evaluate the proposed investment. They had signed a non-binding Letter of Intent in August 2019 for Aramco to potentially acquire a 20% stake in the Mumbai-based firm’s O2C business, which was going to be split off into a separate subsidiary.
Despite calling off the transaction, the companies said their deep engagement during the past two years has given them a greater understanding of each other and provided a platform for broader areas of cooperation. Reliance will continue to be Aramco’s preferred partner for investments in India’s private sector and, in turn, it will collaborate with Aramco and SABIC for investments in Saudi Arabia.
Author: Elaine Burridge, Freelance Journalist
