Reliance Ind sells six ethane carrier ships to Japan's Mitsui

Reliance Industries Ltd (RIL) has announced that its ethane arm – Reliance Ethane Holding Pte Ltd – will offload stake in six of its Very Large Ethane Carriers (VLEC) or ethane carrier merchant ships to Japan's Mitsui O S K Lines Ltd.

The valuation of the deal was not disclosed by either of the companies.

Japanese Mitsui is a bigger player in the shipping industry with a fleet size of over 850 ships under its fold.

"Reliance Ethane Holding Pte Ltd having 100% holding in six limited liability companies which own Very Large Ethane Carriers, Mitsui O S K Lines Ltd of Japan and a strategic minority investor has signed binding definitive agreements for a strategic investment by Mitsui O S K Ltd and minority investor in the six special purpose limited liability companies, each owning a VLEC," RIL said in a statement to the bourses.

Post the completion of this transaction, these six special purpose vehicles will be jointly controlled by Reliance Ethane Holding and Mitsui. Until now, these six VLECs were owned by Reliance Ethane Holding and operated by Mitsui.

On this strategic transaction, P M S Prasad, executive director, RIL, in a statement said, "Given Mitsui is currently the operator of all the six VLECs, investment by Mitsui will deepen our relationship with them and ensure continued safe and efficient operations of the VLECs. We welcome Mitsui as a strategic partner into the special purpose vehicles as they move beyond the current operator role to the joint owner and operator role in the special purpose vehicles".

Takeshi Hashimoto, member of the Board, executive vice president, Mitsui, said, "This investment would enable Mitsui to add six unique VLECs, which we have been operating for some time now, as owners to its existing fleet of over 850 vessels include LNG carrier, other tankers, dry bulkers, car carriers, ferries and coastal RoRo ships and cruise ships. We also have container ships which are chartered by ONE."

Hashimoto further added that their company has detail knowledge about these assets after 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 using this strategic opportunity to be a joint owner and to significantly strengthen our existing relationship with Reliance."

SAILING AHEAD

• 6 – Very large ethane carriers owned by Reliance Ethane Holding
   
• 850 – Fleet size of Mitsui O S K Lines
   
• 100% – Reliance Ethane Holding Ltd holds 100% in six limited liability companies