Reliance Industries Ltd. (RIL), the world's largest integrated producer of polyester will acquire the polyester business of Shubhalakshmi Polyesters Ltd. and Shubhlaxmi Polytex Ltd. The acquisition will be done through RIL's wholly-owned subsidiary Reliance Petroleum Retail Ltd., which now operates as Reliance Polyester Ltd.

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The deal will be done for a cash consideration of Rs 1,592 crore on a slump sale basis. A slump sale is defined as a transfer of one or more undertakings for a lump sum consideration without values being assigned to the individual assets.

Shubhalakshmi Polyesters has a continuous polymerisation capacity of 2.52 lakh MTPA and is into manufacturing polyester fiber, yarns and textile grade chips. It has two manufacturing facilities at Dahej and Silvassa. On the other hand, Shubhlaxmi Polytex has a texturised yarn manufacturing facility at Dahej.

"The acquisitions are a part of the company's strategy to expand its downstream polyester business," it said in an exchange filing. The deal is subject to approval from the Competition Commission of India (CCI) and the respective lenders of the Shubhalakshmi Polyesters & Shubhlaxmi Polytex.

Overall global demand for polyester improved 7 percent to 85 million metric tonnes in FY22, according to Reliance Industries' annual report. "Polyester downstream operating rates varied from stable to strong across the value chain," the report said. "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.

Last week, the company had expanded its presence in the new energy space through the acquisition of a 79.4 percent stake in California-based SenseHawk for $32 million.

In Other News

Reliance Industries is also planning to undertake shutdown of one of its Crude Distillation Unit (CDU) at its Jamnagar refinery for routine maintenance and inspection. The shutdown will last between three to four weeks, starting September 18.

A planned shutdown of its Fluidized Catalytic Cracker (FCC) has already begun over the weekend and will last between four to five weeks.

"The other CDU and Secondary Processing Units are expected to operate normally during this period," the company said.

Shares of Reliance Industries are up 7 percent so far this year.

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First Published:Sept 12, 2022 8:26 AM IST