Billionaire Mukesh Ambani-led Reliance Industries announced on Wednesday that its wholly owned unit Reliance Ethane Holding has struck a deal with Japan’s shipping major Mitsui OSK Lines for a strategic investment into Reliance’s six ‘very large ethane carriers.’ Notably, Reliance Ethane Holding has a 100% holding in six limited liability companies (LLCs) which own Very Large Ethane Carriers (VLEC). “REHPL, Mitsui O.S.K Lines of Japan and a strategic minority investor have signed binding definitive agreements for a strategic investment by MOL and minority investor in the six special purpose limited liability companies (“SPVs”), each owning a VLEC,” Reliance Industries said in a press release.
The transaction is subject to regulatory approvals. Further, post closing, the SPVs shall be jointly controlled by REHPL and MOL. Taking stock of the strategic rationale, PMS Prasad, Executive Director, RIL said that the deal will improve efficiency of the VLECs. “Given MOL is currently the operator of all the six VLECs, investment by MOL will deepen our relationship with them and ensure continued safe and efficient operations of the VLECs. We welcome MOL as a atrategic partner into the SPVs as they move beyond the current operator role to joint owner and operator role in the SPVs,” Prasad said.
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From the perspective of Mitsui OSK Lines, the deal would help in adding six new VLECs to its existing fleet. “This investment would enable MOL to add six unique VLECs, which we have been operating for some time now, as owners to its existing fleet of over 850 vessels which include LNG carrier, other tankers, dry bulkers, car carriers, ferries and coastal RoRo ships and cruise ships,” Takeshi Hashimoto, Member of the Board, Executive Vice President at Mitsui OSK Lines said.
Further, Hashimoto noted that MOL has detailed knowledge about these assets, having supervised the construction and delivery of the six VLECs and subsequently operating them since their delivery. “We are therefore happy and look forward to use this strategic opportunity to be a joint owner and to significantly strengthen our existing relationship with Reliance,” he added.