Reliance Industries acquired the polyester business of Shubhalakshmi Polyesters Limited (SPL) and Shubhlaxmi Polytex (SPTex) for a whopping amount of Rs. 1,592 crores on Saturday.
In a slump sale, Reliance Industries acquired the polyester business of Shubhalakshmi Polyesters Limited (SPL) and Shubhlaxmi Polytex (SPTex) for a whopping amount of Rs. 1,592 crores on Saturday. The deals were executed for a cash consideration of Rs. 1,522 crores and Rs. 70 crores, respectively.
The acquisition is subject to the approval of the Competition Commission of India (CCI) and the respective lenders of Shubhalakshmi Polyesters Limited (SPL) and Shubhlaxmi Polytex Limited (SPTex). This deal by Reliance Industries will strengthen its textile and manufacturing businesses and is also a strategy by Reliance to expand its polyester business.
Reliance acquires SPL and SPTex for cash consideration of Rs. 1,522 cr and Rs. 70 cr, respectively.
Reliance Industries Limited said in a statement that Reliance Petroleum Retail Limited (under name change to ‘Reliance Polyester Limited’), a wholly-owned subsidiary by the company, to acquire the polyester business of Shubhalakshmi Polyesters Limited (SPL) and Shubhlaxmi Polytex (SPTex) for cash consideration of Rs. 1,522 crores and Rs. 70 crores, respectively, aggregating to Rs. 1592 crores by way of slump sale on a going concern basis, executed definitive documents.
Meanwhile, Reliance Industries Limited has also said that it is planning to undertake a shutdown of the Fluidized Catalytic Cracker (FCC) and Crude Distillation Unit (CDU) of its Special Economic Zone refinery at Jamnagar.
This step by Reliance is for routine maintenance and inspection activities. The duration of the shutdown is expected to be about 4-5 weeks for FCC starting September 10 and 3 to 4 weeks for CDU starting September 18.
We will build one of the world’s largest single-train purified terephthalic acids: Mukesh Ambani
Earlier in August, Reliance Industries Limited chairman and managing director Mukesh Ambani told the shareholders at the company’s Annual General Meeting (AGM) that the firm in the polyester value chain will build one of the world’s largest single-train purified terephthalic acid (PTA) plants of 3 million metric tons per annum (MMTPA) capacity at Dahej.
Ambani further stated that investment will also be done in a 1 MMTPA polyethylene terephthalate (PET) plant at Dahej and that both PTA and PET will be targeted for completion by 2026.
Ambani also said that reinvestment will be done in Polyester Filament Yarn (PFY), polyester staple fiber, and polyester expansion with a capacity of over 1 metric ton per annum (MMTPA) and is set to be completed in phases by the year 2026.
Besides that, Reliance Industries Limited (RIL) also intends to more than double polyethylene terephthalate (PET) recycling capacity in a year to 5 billion bottles. These were the company’s plans for the next five years to invest Rs. 75 crores to expand capacities in existing and new value chains.
Shubhalakshmi Polyesters Limited (SPL) has a continuous polymerization capacity of 2.52 lakh MT per annum.
Besides, Shubhalakshmi Polyesters Limited (SPL) has posted turnovers of Rs 2,702.50 crore, Rs 2,249.08 crore, and Rs 1,768.39 crore in financial years 2019, 2020, and 2021, respectively. On the other hand, Shubhlaxmi Polytex (SPTex) had turnovers of Rs 337.02 crore, Rs 338.00 crore, and Rs 267.40 crore, respectively.
In May 2000, Reliance Industries Limited acquired a 25% stake through Synergy Synthetics in DCL Polyesters and later the JCT polyester business.
And before that, Reliance Industries Limited (RIL) in 1999 also acquired Raymond Synthetics for Rs. 22.33 crores, and this move helped its PFY rise by 30%. The founder of RIL, Dhirubhai Ambani, initially began with the yarn trading business and then subsequently entered into areas like telecom and organized retail, among others.
In the present day, the oil-to-chemicals business is its largest revenue earner. The segment posted approximately Rs 162 crore in the quarter ending June 30 out of gross revenue of Rs 268,213 crore, followed by digital services at Rs 28,511 crore and retail at Rs 58,569 crore.
Earlier this week, Reliance had also announced that it was acquiring a majority stake in California-based solar energy generation software developer Sense Hawk for Rs 256 crore. This acquisition of a 79.4 percent stake in Sense Hawk is part of RIL’s massive push into clean energy, where the announcement of an investment of Rs 75,000 crore over three years has already been made.
Reliance Industries Limited, in a statement, mentioned that it has signed definitive agreements to acquire a majority stake in Sense Hawk Inc. for a total transaction value of Rs. 256 crores, including funding for future growth, R&D, and commercial rollout of products.
edited and proofread by nikita sharma