Mukesh Ambani-promoted Reliance Industries, the largest polyester manufacturer in the world, has dropped its plans to acquire the polyester manufacturing facility of Unifi Kinston, a subsidiary of US-based polyester-maker Unifi. RIL was planning to invest about $250 million in the polyester manufacturer.
In a filing to the United States Securities and Exchange Commission (SEC) on August 27, Unifi Kinston informed the regulator that Reliance had backed out of the deal.
The acquisition was planned to increase RIL's polyester capacity by an additional 25 per cent. Mukesh Ambani had told shareholders at the company's annual general meeting a few weeks ago that Reliance's polyester capacity rose by a quarter to 2.5 million tonnes a year after it bought the assets of Malaysian polyester-maker Hualon Corp last year.
"The buyer was terminating the Reliance agreement and would not be proceeding with the sale. The registrant (Unify Inc) retains certain rights to sell these assets located at the Kinston facility for a period of two years from March 20, 2008," said the filing.
Reliance Industries USA, the US arm of Reliance, had entered into an asset-purchase agreement with Unifi in June this year for the sale of all remaining assets and structures located at the Unifi Kinston's polyester manufacturing facility for $12.2 million.
RIL was planning to acquire the facility through a special purpose vehicle (SPV) and infuse over $215 million to manufacture polyester resins at this factory. Plans were to add about 200 new jobs at the plant.
Unifi said if after the two-year period, the assets have not been sold, the registrant would convey them to E.I. DuPont de Nemours for no value.
Unifi had acquired the plant in September 2004 from Invista, a former division of chemical major DuPont, and shut down operations during last October as a part of a consolidation of excess capacity.
