Reliance acquires 12.7% stake in US-based transport company SkyTran

Reliance Industrial Investments and Holdings, a wholly-owned subsidiary of RIL, on Wednesday said it had acquired a 12.7 per cent stake in US-based SkyTran. Reliance said the shareholding in SkyTran, a venture-funded company developing Personal Rapid Transit Systems’ technology, will be on fully diluted basis.

Fully diluted shares are the total common shares of a company — issued and outstanding. “Reliance has made a strategic investment into SkyTran as part of SkyTran’s recently concluded preferred stock financing, with an option to further invest up to $25 million in convertible notes, subject to approval from SkyTran board," the firm said. SkyTran, which has partnered with National Aeronautics and Space Administration (NASA) in the US and Israel Aerospace Industries (IAI) in Israel, has developed magnetic levitation technology for implementing personal transportation systems. 

“Reliance is well-placed to capitalise on its existing business portfolio and capabilities to accelerate the development of SkyTran across the world, especially in India,” said Akash Ambani, director, Jio.

Reliance has made the investment with the objective of fostering an exclusive partnership in India, where it will work closely with SkyTran to conduct pilots, followed by implementation of its network. 

It will also play an active role in advancing the SkyTran solutions in sectors like telecom (4G/5G/IoT/giga fiber), digital platforms and services, advanced materials, and electric batteries. 

The company plans to nominate a director on the board of SkyTran. Global investors, including funds promoted by Innovation Endeavors, Adam Neumann (founder of WeWork), Tim Draper, and others participated in the preferred stock financing.

“We believe our partnership with Reliance has the potential to improve the lives of people in India and across the globe,” said John Cole, Founder and Chief Executive Officer of SkyTran. Covington & Burling acted as the legal advisor to Reliance, while Wilson Sonsini Goodrich and Rosati were advisors to SkyTran.