The transfer of the gasification assets of Reliance Industries (RIL) to a separate entity has received the approval of shareholders and creditors. The company gave this information on Friday (March 11). RIL had initiated the process of shifting its gasification unit to a separate subsidiary. The gasification unit produces the synthesis gas. It is believed that this move will increase the value of Reliance’s business (Value Unlocking).
The Mumbai Bench of the National Company Law Tribunal (NCLT) had asked RIL to take approval of creditors and shareholders for transfer of gasification assets. It had said that the company would have to convene a meeting of secured creditors, unsecured creditors and shareholders for this.
RIL told stock exchanges on Thursday evening that a proposal to transfer the gasification assets to a separate subsidiary was placed before the shareholders, creditors and unsecured creditors. About 99 percent of the participants in the meeting voted in support of this proposal.
The gasification unit produces syngas to meet the energy requirements of the Jamnagar plant. With the use of Syngas for fuel, there is no worry about its supply. At the same time, it also helps in reducing the effect of fluctuations in energy costs. Syngas is also used in the production of hydrogen at the Jamnagar refinery.
RIL has devised such a strategy, in which completely recyclable energy has been given place. This will help the company to become a zero carbon company. The company is using recyclable value materials and chemicals to meet its energy requirements.
The company has also said that repurposing of gasification assets will help in using syngas as a reliable source of feedstock. This will make it easier to meet the growing domestic demand. Also, there will be an attractive business opportunity. India is a fast growing market. In such a situation, the shortage of high value chemicals is expected to continue in the coming times. This move will also benefit Reliance as the first step towards building a hydrogen ecosystem.
Reliance Industries had also informed the shareholders about its plan. It reported in February that given the opportunity to use Syngas, the risk associated with this business is likely to be completely separated from other businesses. There will also be an opportunity to attract different types of investors for this different business.
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