Jio Financial Services Demerger: NCLT Convenes Shareholder, Creditor Meetings On May 2

The National Company Law Tribunal, Mumbai has given its initial nod to the spin off the financial services business of Reliance Industries Ltd.

The new financial arm, Reliance Strategic Investments Ltd., will be later renamed to Jio Financial Services. The court has called for a meeting of the shareholders of Reliance on May 2.

Under the proposed scheme, the shareholding of Jio Financial Services will mirror that of Reliance Industries. Each shareholder will get one share of Jio Financial Services for every single share held in Reliance Industries.

Reliance Industries had approved a scheme for the demerger of its financial services business in October last year.

Reliance Industries has 33,62,915 equity shareholders holding 676,59,94,014 equity shares. There are no preference shareholders. The company also has 90 secured creditors with an outstanding amount of approximately Rs 49,000 crore. It has unsecured creditors totaling over 13,000, with an outstanding debt of around Rs 27,000 crore. Both secured and unsecured creditors shall also meet on May 2.

Reliance Strategic Investments, on the other hand, has seven equity shareholders with 20,20,200 equity shares. The company has one preference shareholder holding 31,48,155, 9% non-cumulative, compulsory convertible preference shares. It has no secured creditors and has one unsecured creditor with an outstanding debt of nearly Rs 7 lakh. As the company has already procured consent from all of its shareholders and creditors, there would be no shareholder or creditor meeting.