Sunbright, a business associate of Reliance, has signed a memorandum of understanding with the National Organic Chemicals Industries Limited to take over its petrochemicals and plastics products divisions.

Under this proposal, the assets of Nocil's petrochemical division, certain liabilities of the company, and the business and undertaking of the plastic products division as a going concern basis will be demerged from Nocil and will be vested in Nocil Petrochemicals Limited, a wholly owned subsidiary of Nocil.

Sunbright will invest in equity of NPL after the process of demerger is completed.

The board of directors of Nocil at its meeting held on Wednesday has approved the restructuring proposal and the offer of Sunbright. Nocil will shortly file 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 approval of the shareholders and creditors.

The proposed take over of Nocil's petrochemical and plastics products division will provide significant synergies with existing petrochemicals businesses of Reliance Industries Ltd and Indian Petrochemicals Corporation Ltd.

Nocil's petrochemicals complex has total petrochemicals capacity of 300,000 tonnes per annum (tpa), which include an ethylene cracker of 80,000 tpa, value added chemicals 90,000 tpa, and fibre intermediates 20,000 tpa.

In addition, the complex has a polymer capacity of 80,000 tpa. The plastics products division at Akola, Maharashtra has a capacity of about 10,000 tonnes per annum of processed polymer products.