Reliance Industries Limited (RIL), the world’s largest integrated polyester producer, will purchase Shubhalakshmi Polyesters Ltd. and Shubhlaxmi Polytex Ltd.’s polyester businesses. The deal will be completed through RIL’s fully owned subsidiary Reliance Petroleum Retail Ltd., which is now known as Reliance Polyester Ltd.
The transaction would be completed on a slump sale basis for a cash consideration of Rs 1,592 crore. A slump sale is described as the transfer of one or more businesses for a lump sum payment without assigning valuations to the individual assets.
Shubhalakshmi Polyesters manufactures polyester fibre, yarns, and textile grade chips and has a continuous polymerisation capacity of 2.52 lakh MTPA. It operates two manufacturing plants in Dahej and Silvassa. Shubhlaxmi Polytex, on the other hand, has a texturised yarn manufacturing facility in Dahej.
In an exchange filing, the company stated, “The acquisitions are a part of the company’s strategy to expand its downstream polyester business,” The transaction is subject to approval by the Competition Commission of India (CCI) and the lenders of Shubhalakshmi Polyesters and Shubhlaxmi Polytex.
According to Reliance Industries’ annual report, global demand for polyester increased by 7% to 85 million metric tonnes in FY22. According to the research, “Polyester downstream operating rates varied from stable to strong across the value chain,” “Lower polyester imports on account of higher ocean freights supported demand and margins. The company expects growth in the downstream polyester chain market to remain steady.”
The corporation strengthened its position in the new energy industry last week when it paid $32 million for a 79.4 percent interest in California-based SenseHawk.
Reliance Industries also intends to shut down a Crude Distillation Unit (CDU) at its Jamnagar refinery for periodic maintenance and inspection. Starting September 18, the outage will continue for three to four weeks.
The suspension of its Fluidized Catalytic Cracker (FCC) began over the weekend and will continue for four to five weeks. The business stated that, “The other CDU and Secondary Processing Units are expected to operate normally during this period.” Reliance Industries’ stock is up 7% so far this year.