Reliance Industries seeks shareholder nod to alter MoA for EPC undertaking

Move comes following approval by RIL board in October to restructure the business; company also seeking shareholder nod for appointment of KV Kamath as RIL independent director

Reliance Industries (RIL) is seeking shareholder approval to alter its memorandum of association (MoA) to include two new sub-clauses pertaining to engineering, procurement and construction (EPC) services.

The development comes following the approval by the RIL board in October to restructure the EPC business, which is part of Reliance Projects and Property Management Services, a wholly-owned subsidiary of the company. The board had given its nod on October 21 for the EPC and infrastructure undertaking of Reliance Projects and Property Management Services to be merged into RIL. The deal was a related-party transaction and was being done at arm’s length, the company had said. 

On Wednesday, in a postal ballot notice issued to the stock exchanges, RIL said that it was seeking shareholder approval to alter its MoA to include two new sub-clauses pertaining to the EPC business. The company also said that it was seeking shareholder approval for the appointment of KV Kamath as an independent director of the company.  The e-voting period would begin on December 1 and conclude on December 30, it said.

Sub-clause 11, the notice said, would allow the company to undertake project management services, advisory services, asset lifecycle management, turnkey projects of every description as well as enter into contracts and joint ventures relating to construction, repair, maintenance whether alone or jointly with any other person.

Sub-clause 12, the notice said, would allow RIL to carry on the business as civil, mechanical , electrical and chemical engineers among other activities in the engineering and procurement space.

"The realigned EPC resources will strengthen RIL's delivery capabilities in the area. The company has the expertise in undertaking large projects in oil & gas, new energy and telecom. The move will further aggregrate its strengths, in this space" Deven Choksey, managing director at Mumbai-based brokerage KR Choksey, said.

RIL had indicated in October that the new EPC undertaking would facilitate internationalization by setting up EPC centres of excellence at strategic offshore locations.

It would align with existing subsidiaries of RIL in USA and Dubai. And would also incorporate new subsidiaries in Singapore and UK. These subsidiaries would enable faster mobilisation of high-quality talent and EPC resources in an increasingly constrained global EPC environment, it added.