Shares of Reliance Industries in trade on November 25, 2021 gained over 4 percent to day’s high price of Rs. 2455.95 as against the previous close of Rs. 2351.4 apiece on the NSE.
The gains in the scrip of the heavyweight stock comes after the company’s board on November 24 announced that it has decided to implement a Scheme of Arrangement between (i) Reliance Industries Limited (‘the Company”https://www.goodreturns.in/”RIL’) and its shareholders and creditors; and (ii) Reliance Syngas Limited (‘RSL’) and its shareholders and creditors (‘the Scheme’).
RSL is a company incorporated under the Companies Act, 2013 on November 1, 2021. The Company has invested Rs.10,00,000 in cash in 100,000 equity shares of Rs.10 each of RSL. RSL is a wholly-owned subsidiary of the Company. RSL is yet to commence its business operations.
The Scheme provides for transfer of Gasification Undertaking (as defined in the Scheme) of the Company to RSL as a going concern on slump sale basis for a lump sum consideration equal to the carrying value of Gasification Undertaking as on the Appointed Date.
Rationale for the scheme as stated in the exchange filing is as under:
“The Gasification Undertaking produces syngas to meet the energy requirements at Jamnagar as refinery off-gases which earlier served as fuel were repurposed into feedstock for the Refinery Off Gas Cracker (ROGC). This enables production of olefins at competitive capital and operating costs. Syngas as a fuel ensures reliability of supply and helps reduce volatility in the energy costs. Syngas is also used to produce Hydrogen for consumption in the Jamnagar refinery”, said the filing.
“RIL targets to have a portfolio which is fully re-cyclable, 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. 3. As RIL progressively transitions to renewables as its primary source of energy, more syngas will become available for upgradation to high value chemicals including C1 chemicals and Hydrogen. Further, carbon di-oxide released during the process of producing Hydrogen is highly concentrated and easy to capture, substantially reducing the cost of carbon capture. Overall, these steps will help sharply reduce carbon footprint of Jamnagar complex”, adds the statement.
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Story first published: Thursday, November 25, 2021, 12:12 [IST]
Original news source Credit: www.goodreturns.in