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Reliance Industries (RIL) board on Friday approved a scheme of arrangement under which the EPC and Infrastructure Undertaking 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 in RIL is expected to create a focused EPC undertaking in the company which will cater to the needs of the group.
At present, the EPC resources of the RIL group are spread across different operating entities. The Mukesh Ambani-backed RIL is equipped with a strong team of 4,000 engineers holding proven expertise across engineering, procurement, project management, and construction. Noteworthily, RPPMSL also has a team of 20,000 professionals.
RIL said that the focused EPC Undertaking will aggregate and synergize the engineering capabilities and expertise of the group. The EPC undertaking will play a pivotal role in implementing RIL’s large projects across O2C, New Energy, and 5G roll-out.
The implementation of these mega projects will require significant mobilization of global technology and EPC resources. Increasing infrastructure spend across geographies in oil & gas, chemicals, telecom, and renewable energy sectors is expected to drive significant demand for EPC resources, it added.
Notably, as the transaction will be a merger of a division of a wholly-owned subsidiary into the parent, RIL will not issue any equity shares and thereby there will be no change in the shareholding pattern. Also, there is no cash consideration that is required to be paid under the scheme.
The deal is a related-party transaction and at arm’s length.
As of March 31, 2022, the turnover of RIL and the EPC and Infrastructure Undertaking of RPPMSL stood at ₹445,375 crore and ₹43,071 crore respectively.
According to RIL, the new EPC Undertaking will facilitate internationalization by setting up EPC Centres of Excellence at strategic offshore locations. It will align with existing subsidiaries of RIL in the USA and Dubai.
Also, the new EPC Undertaking will incorporate new subsidiaries in Singapore and UK. These subsidiaries will enable faster mobilisation of high-quality talent and EPC resources in an increasingly constrained global EPC environment.
Further, the realigned EPC resources will further strengthen RIL’s EPC delivery capabilities by tapping global resources and supply chains. Additionally, it will also enhance productivity as working across time zones will reduce costs and schedules while ensuring high-quality output.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
