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Reliance Industries (RIL) is seeking shareholder approval to amend its memorandum of association (MoA) to include two new sub-clauses relating to engineering, procurement and construction (EPC) services.
The development comes after RIL’s board in October approved the restructuring of the EPC business, which is part of Reliance Projects and Property Management Services, the company’s wholly-owned subsidiary. On October 21, the board gave its nod to EPC and infrastructure firm Reliance Projects and Property Management Services to merge into RIL. The deal was a related party transaction and was done at arm’s length, the company said.
On Wednesday, in a postal ballot notice issued to stock exchanges, RIL said it is seeking shareholder approval to amend its Memorandum of Understanding to include two new sub-clauses relating to EPC business. The company also said it is seeking shareholder approval for the appointment of KV Kamath as an independent director of the company. The electronic voting period will begin on December 1 and end on December 30, according to the announcement.
Sub-Clause 11, the notice said, will enable the company to undertake project management services, advisory services, asset life cycle management, turnkey projects of every description, and to enter into contracts and joint ventures in connection with construction, repair, maintenance, either alone or together with any other person.
Sub-clause 12, the notification said, would enable RIL to carry out work as civil, mechanical, electrical and chemical engineers, among other engineering and procurement activities.
“The revamped EPC resources will strengthen RIL’s delivery capabilities in this area. The company has expertise in undertaking major projects in oil and gas, new energy and telecommunications. This move will further enhance its strengths in this space,” Deven Choksey, managing director at Mumbai-based brokerage KR Choksey, said.
RIL had indicated in October that the new EPC venture would facilitate internationalization by establishing EPC centers of excellence at strategic offshore locations.
It would align with RIL’s existing subsidiaries in the US and Dubai. It would also include new subsidiaries in Singapore and the UK. These subsidiaries would enable faster mobilization of high-quality talent and EPC resources in an increasingly constrained global EPC environment, it added.
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