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The board of Reliance Industries (RIL) on Friday approved a scheme of arrangement under which the EPC and Infrastructure business of its wholly-owned subsidiary Reliance Projects and Property Management Services (RPPMSL) is proposed to be demerged into RIL. This demerger, along with the existing EPC team at RIL, is expected to create a focused EPC venture within the company to cater to the needs of the group.
Currently, RIL Group’s EPC resources are spread over various operating entities. Mukesh Ambani-backed RIL is equipped with a strong team of 4,000 engineers who have proven expertise in engineering, procurement, project management and construction. It is important to note that RPPMSL also has a team of 20,000 professionals.
RIL said the focused EPC company will aggregate and synergize the group’s engineering capabilities and expertise. The EPC business will play a key role in the implementation of RIL’s major projects under O2C, New Energy and 5G rollout.
The implementation of these mega projects will require significant mobilization of global technology and EPC resources. Increasing infrastructure spending across geographies in the oil and gas, chemicals, telecommunications and renewable energy sectors is expected to drive significant demand for EPC resources, it added.
Notably, since the transaction will be a merger of a wholly-owned subsidiary division into the parent company, RIL will not issue any equity shares and therefore there will be no change in the ownership pattern. Also, there is no fee to be paid under the scheme.
Business is a transaction with related parties and at arm’s length.
As of March 31, 2022, the turnover of RIL and EPC and infrastructure company RPPMSL was ₹445,375 crowns and ₹43,071 crores respectively.
According to RIL, the new EPC venture will facilitate internationalization by establishing EPC centers of excellence at strategic offshore locations. It will align with RIL’s existing subsidiaries in the US and Dubai.
Also, the new EPC company will incorporate new subsidiaries in Singapore and the UK. These subsidiaries will enable faster mobilization of high-quality talent and EPC resources in an increasingly constrained global EPC environment.
Further, the aligned EPC resources will further strengthen RIL’s EPC delivery capabilities by leveraging global resources and supply chains. In addition, it will also increase productivity as working across time zones will reduce costs and schedules while ensuring high quality results.
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