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Reliance Industries to set up wholly-owned subsidiary for digital platform initiatives

Reliance Industries to set up wholly-owned subsidiary for digital platform initiatives

| @indiablooms | 25 Oct 2019, 08:20 pm

Mumbai/IBNS: The Board of Directors of Mukesh Ambani-led Reliance Industries Limited (RIL) on Friday approved the formation of a wholly-owned subsidiary (“WOS”) for Digital Platform initiatives and investment of Rs. 1,08,000 crore in the WOS through Optionally Convertible Preference Shares (OCPS).

The WOS will also acquire RIL’s equity investment of Rs. 65,000 crore in RJIL.

The Board of Directors of RJIL approved a scheme of arrangement between RJIL and certain classes of its creditors including debenture holders for transfer of identified liabilities of up to Rs. 1,08,000 crore to RIL;

It approved the Rights Issue of Optionally Convertible Preference Shares (‘OCPS’) aggregating up to Rs. 1,08,000 crore for the purpose of payment of consideration for transfer of identified liabilities - WOS to subscribe to this issue.

Consequent to the above, RJIL will become virtually net debt free company by 31st March 2020, with exception of spectrum related liabilities, the company said.

Like global technology peers, the Digital Platform Company with negligible leverage makes a compelling investment proposition for both strategic and financial investors, many of whom have evinced strong interest in partnering with us, it said. It will have significant financial strength to address the Digital Services opportunity in India, it added.

The proposed consolidated structure will be compliant with all statutory requirements.

Commenting on the formation of the Platform Company,  Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “This new Company will be a truly transformational and disruptive digital services platform. It will bring together India’s No.1 connectivity platform, leading digital app ecosystem and world’s best techcapabilities globally, to create a truly Digital Society for each Indian. Jio has been heralding the digital services revolution in India and will continue to do so in the years to come."

"Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners. We will induct the right partners in our Platform Company,creating and unlocking meaningful value for RIL shareholders.”

Reliance Industries Limited (RIL) is India’s largest private sector company, with aconsolidated turnover of INR 622,809 crore ($90.1 billion), cash profit of INR 64,478 crore ($ 9.3 billion), and net profit of INR 39,588 crore ($5.7 billion) for the year ended March 31, 2019.

RIL’s activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services.

RIL is the top most ranked company from India to feature in Fortune’s Global 500 list of ‘World’s Largest Corporations’ – currently ranking 106th in terms of both revenues andprofits. The company stands 71st in the ‘Forbes Global 2000’ rankings for 2019 – top-mostamong Indian companies. It ranks 10th among LinkedIn’s ‘The Best Companies to Work For In India’ (2019).

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