Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Merger or Acquisition (February 2021)
34 slides from Reliance Industries's merger presentation, Feb 23, 2021
Slide 1: Cover letter to BSE and NSE on Scheme presentation
February 23, 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Plot No. C/1, G Block, Bandra – Kurla Mumbai 400 001 Complex, Bandra (East), Mumbai 400 051 Scrip Code: 500325 / 890147 Trading Symbol: RELIANCE / RELIANCE PP Dear Sirs, Su
Slide 2: Proposed Reorganization of O2C Business of RIL
Proposed Reorganization of O2C Business of RIL
Slide 3: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or
Slide 4: Reliance Has Built Three Mega-Growth Engines Creating Shareholder Value
Reliance Has Built Three Mega-Growth Engines Which Continue to Create Significant Shareholder Value… Largest and most complex single site refinery at Jamnagar with 1.4 MMBPD crude refining capacity; vertically integrated portfolio across petrochemicals value chain, among lowest cost positions and gl
Slide 5: With Robust Integration of Environmental, Social and Governance Parameters
…With Robust Integration of Environmental, Social and Governance Parameters Across the Group Environment Social Governance ✓ Board diversity in skill, industry and 99+ mm m3 11+ 27 gender Rainwater 22+ mm mm man Number of startups Saplings planted hours ✓ Sustainability oversight and harvesting capa
Slide 6: O2C Business Reorganization: Setting the Context
O2C Business Reorganization: Setting the Context 1 RIL's unprecedented growth in the last decade has been driven by significant growth in O2C Business and rapid scale-up of new consumer businesses - Digital and Retail 2 Strong underlying performance of each business has resulted in a strong and dive
Slide 7: Rationale for O2C Business Reorganization
Rationale for O2C Business Reorganization 1 Independent growth company enables focused pursuit of opportunities across O2C value chain 2 Enhanced efficiencies through self-sustaining capital structure and dedicated management team 3 Facilitates value creation through strategic partnerships and attra
Slide 8: Presentation Sections
Presentation Sections 1 RIL Oil-to-Chemicals (O2C): Unique Fully-Integrated Platform 2 Proposed Reorganization of O2C 3 Financial Performance of O2C in the Context of RIL 4 RIL and O2C Post Reorganization 5 Key Considerations 7
Slide 9: RIL Oil-to-Chemicals (O2C): Unique Fully-Integrated Platform
1 RIL Oil-to-Chemicals (O2C): Unique Fully-Integrated Platform 8
Slide 10: O2C Business: World Class Assets of Global Scale
O2C Business: World Class Assets of Global Scale… 1.4MMBPD Crude Refining Capacity 38.4MMT of Petrochemicals Production Largest single site refinery complex globally (FY20) 20 Consecutive Years 4th Outperformance over regional benchmark Largest Producer of PTA Globally 21.1 2nd Complexity Index1 Lar
Slide 11: Generating Significant Benefits Through Deep Integration
…Generating Significant Benefits Through Deep Integration ◼ World’s largest and most integrated O2C Complex Feedstock ◼ World’s largest ROGC, with downstream LLDPE, LDPE, MEG plants Security Jamnagar Supersite ◼ Top decile refinery performance and top quartile cracker costs ◼ Largest single location
Slide 12: Robust Portfolio Catering to Growing Consumption Markets
Robust Portfolio Catering to Growing Consumption Markets Margin Capture Across Conversion Reduced Exposure to Individual Counter-Cyclicality Between Polymers Chains Product Cyclicality and Polyesters Aromatics & Fibre Fuels Polymers Elastomers Intermediates Polyesters ◼ Gasoil ◼ PE ◼ PBR ◼ PTA ◼ PFY
Slide 13: Integrated Pan-India Fuel Retail and Mobility Solutions
Integrated Pan-India Fuel Retail and Mobility Solutions #1 Growth 1,400+ 5,500 2x India Expected to be Targeted Retail RIL outlet Throughput Existing Retail Fastest Growing Fuel Outlets in Next 5 with respect to Outlets Market Globally Years Industry Average ◼ To be India’s largest and most preferre
Slide 14: Proposed Reorganization of O2C
2 Proposed Reorganization of O2C 13
Slide 15: Shareholding Structure
Shareholding Structure Current Shareholding Structure Shareholding Structure Post Reorganization Promoter DIIs FIIs Others Promoter DIIs FIIs Others Group (Public) (Public) (Public) Group (Public) (Public) (Public) 49.14% 12.54% 24.49% 13.83% 49.14% 12.54% 24.49% 13.83% 100% Reliance O2C Limited (Wh
Slide 16: Resultant Corporate Structure of RIL On Appointed Date
Resultant Corporate Structure of RIL On Appointed Date Reliance Industries 100% Subsidiary 85.1% Subsidiary 66.3% Subsidiary Segment Segment Reliance Retail Jio Platforms O2C Subsidiary Oil and Gas Other Ventures Limited Limited Refining & Marketing / Petrochemicals 51% 100% 100% 100% 74.9% Reliance
Slide 17: Business Perimeter of the Proposed O2C Subsidiary (1/2)
Business Perimeter of the Proposed O2C Subsidiary (1/2) A Refiningand Refining andPetrochemicals Petrochemicals B FuelRetail Fuel Retailsubsidiary Subsidiary 1. Plants and manufacturing assets at: 51% owned by O2C and 49% by BP Other OtherSubsidiaries Subsidiaries C Hoshiarpur ◼ Reliance Global Ener
Slide 18: Business Perimeter of the Proposed O2C Subsidiary (2/2)
Business Perimeter of the Proposed O2C Subsidiary (2/2) D Key Other Assets/ Contracts/ Employees E Key Liabilities ◼ All trade and other related payables in relation to O2C ◼ All assets, including storage tanks at Dahej Ethane ◼ Loan from RIL against consideration for transfer of O2C Manufacturing D
Slide 19: Timeline and Approvals
Timeline and Approvals Appointed Date ◼ O2C Scheme becomes effective – Appointed Date – 1-Jan-2021 ◼ SEBI and stock exchanges – approval received ◼ Equity Shareholders and Creditors ◼ Regulatory Authorities and Income Tax Authority Approvals Required ◼ NCLT Mumbai and NCLT Ahmedabad ◼ Scheme filed w
Slide 20: Financial Performance of O2C in the Context of RIL
3 Financial Performance of O2C in the Context of RIL 19
Slide 21: RIL's Consolidated Financial Performance
RIL’s Consolidated Financial Performance Revenue Profile ($bn) EBITDA Profile ($bn) CAGR: 26% $ 90.4 CAGR: 23% $ 14.0 $ 85.6 $ 12.7 $ 13.0 $ 67.1 $ 10.2 $ 59.0 $ 7.6 $ 45.2 $ 64.6 $ 61.8 $ 8.7 $ 48.2 $ 7.5 $ 7.4 $ 38.9 $ 40.0 $ 6.2 $ 4.9 FY17 FY18 FY19 FY20 FY21* FY17 FY18 FY19 FY20 FY21* Consolidat
Slide 22: Pro-forma RIL (Standalone) Balance Sheet Post Reorganization
Pro-forma RIL (Standalone) Balance Sheet Post Reorganization as on Appointed Date (01 Jan 2021) Assets $bn Liabilities $bn ◼ O2C undertaking to be transferred to a wholly Long Term Assets 45 Total Equity 45 owned subsidiary at tax net worth – tax neutral for RIL Loan to O2C 25 Total Borrowings 33 ◼
Slide 23: Pro-forma O2C (Standalone) Balance Sheet as on Appointed Date
Pro-forma O2C (Standalone) Balance Sheet as on Appointed Date (01 Jan 2021) ◼ O2C to pay floating rate Assets $bn Liabilities $bn interest linked to 1-year SBI MCLR rate Long Term Assets 40 Total Equity 12 ◼ Long-dated loan with flexibility to structure Net Working Capital 2 Loan from RIL 25 repayme
Slide 24: RIL (Consolidated) Balance Sheet as on Appointed Date
RIL (Consolidated) Balance Sheet as on Appointed Date (01 Jan 2021) Assets $bn Liabilities $bn ◼ Investment grade International (BBB+/ Long Term Assets 122 Total Equity 88 Baa2), and domestic (AAA), credit ratings Cash & Equivalents* 30 Non-Controlling Interests 13 expected to be retained ◼ No chang
Slide 25: RIL and O2C Post Reorganization
4 RIL and O2C Post Reorganization 24
Slide 26: RIL After O2C Reorganization
RIL After O2C Reorganization What Remains in RIL Existing Businesses and Investments New Businesses ◼ Upstream Oil & Gas ◼ New Energy & New Materials Business ◼ Retail, including investments in subsidiaries ◼ Digital Platform Ecosystem and Incubation Platforms ◼ Digital Services, including investmen
Slide 27: Reliance's Vision to be Net Carbon Zero by 2035
Reliance’s Vision to be Net Carbon Zero by 2035 Opportunity to accelerate New Energy and New Materials businesses based on RIL’s vision of clean and green development Build an optimal mix of reliable, clean and affordable energy and storage using solar, wind and batteries Accelerate transition to a
Slide 28: O2C Strongly Positioned to Capture New Growth Opportunities
O2C Strongly Positioned to Capture New Growth Opportunities O2C’s goal is to maximize crude to chemicals conversion and create a sustainable, holistic, circular materials feedstock Crude Feedstock High-Value Chemicals End-Products Waste Waste Recycling O2C Will Focus On 1◼ Recycling and circular eco
Slide 29: Interaction Between New RIL and O2C
Interaction Between New RIL and O2C O2C Business New Energy + 1 Carbon Capture – Invest in next- New Materials generation carbon capture and storage technologies to convert CO2 into useful products and chemicals 1 Develop a green energy ecosystem, including renewable Close Interplay between 2 H2 Pro
Slide 30: Key Considerations
5 Key Considerations 29
Slide 31: Potential Considerations for RIL's Creditors
Potential Considerations for RIL’s Creditors ◼ Creditors get access to cash from all RIL businesses ◼ Efficient upstreaming of cash from O2C to RIL Access to — Interest + debt repayments on long-term loan Diversified Cash Flows — Dividends Source of Cash ◼ O2C cash flows optimized to fund own growth
Slide 32: Potential Considerations for RIL's Shareholders
Potential Considerations for RIL’s Shareholders 1 ◼ O2C – Growth from high value downstream chemicals and materials Four High Growth ◼ Digital - Connectivity and scaling up of digital platforms Engines Driving ◼ Retail - Consumer-led growth leveraging technology & omni-channel presence Value Creatio
Slide 33: Conclusion: Beneficial for all Stakeholders
Conclusion: Beneficial for all Stakeholders O2C reorganization creates an independent, global scale growth engine for RIL, with strong cash flow 1 generation potential 2 No impact on RIL’s consolidated financials, investment grade international, and domestic AAA credit ratings 3 O2C subsidiary facil
Slide 34: Growth is Life
Q Reliance Industries Limited Growth is Life...
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