Crisil announced the merger of three major Reliance Industries promoter group companies including RPTL (Reliance Ports and Terminals), Reliance Gas Transportation Infrastructure (RGTIL), Reliance Utilities and Power (RUPPL) with Reliance Industries Holding (RIHPL). All these three key entities of Reliance Industries will now be owned by the same owner. In order to prevent the setbacks that it has witnessed recently, Reliance Industries has engaged in this restructuring plan as a progressive measure.
It will require demerging of investments of all types including impaired investments involving changes in terms of recovery plans for specific preference shares. It will also enable alleviating any kind of chaos catering to cross holding of shares, loans and advances among the group companies. Crisil that had previously announced satisfactory ratings for Reliance Industries has stated that this move will not affect the aggregate external debts and cash flows for these three companies though the standalone net worth of the companies might fall.
Reliance Industries Holding was commenced with an initiative to lower the cross- holdings and simplify the entire structuring of the personal investments of Mukesh Ambani, the Chairman of Reliance Industries. Reliance Ports and Terminal Ltd manages importing of crude oil and petrochem export needs of RIL (Reliance Industries Ltd).
Mukesh Ambani has been the absolute owner of several companies and this merging will enable harmonizing investments of all these companies. While RIHPL has 100% ownership in RUPPL, RGTIL and PTL, it also holds direct or indirect economic interest in around 370 million RIL shares.
RPTL (Reliance Ports and Terminals), Reliance Gas Transportation Infrastructure (RUPPL ) and RPTL ( Reliance Ports and Terminals) have all collaborated with Reliance Industries Holding (RIHPL) in a new restructuring plan.