Reliance to take over Nocil

The Reliance juggernaut continues to roll on. On Wednesday, India’s largest corporate announced that its business associate Sunbright is taking over the petrochemicals and plastic products division of National Organic Chemicals Industries (Nocil) of the Arvind Mafatlal group.

It has signed a MoU with Nocil to this effect, a press release issued here said. Nocil was a leading petrochemical company earlier but fell into bad times due to loan defaults, misfired strategic plans and mismanagement. The total liabilities of Mafatlal Industries and Nocil alone of the group are Rs 1,200 crore. Nocil and other Arvind Mafatlal group companies had defaulted on loans taken from banks and financial institutions. Accordingly, the assets of Nocil’s petrochemicals division and certain liabilities besides the business and undertaking of the Nocil’s plastic products division as a going concern is to be demerged from Nocil and vested with Nocil Petrochemicals (NPL), a wholly-owned subsidiary of Nocil.

Sunbright will invest in NPL equity after the demerger process is completed. The restructuring proposal and the offer of Sunbright were approved by the Nocil board of directors at its meeting here on Wednesday. Nocil will be shortly filing a petition in the Bombay High Court under Section 391-394 of the Companies Act, 1956, to give effect to this proposal after obtaining the necessary clearances from the shareholders and creditors.