Reliance Industries Ltd (RIL) is in the process of selling a 20% stake in the company’s flagship chemicals and refining business to Saudi Aramco in a deal valued at $15 billion, as the Indian company seeks to cut its massive debt and secure an assured supply of crude oil to its refineries.
The investments are subject to due diligence, definitive agreements, regulatory and other approvals, Mukesh Dhirubhai Ambani, the chairman in RIL said. The Saudi Aramco partnership will cover all of petrochemicals assets RIL’s refining, including its 51% of stake in the fuel retailing joint venture with BP. A joint venture was announced by RIL and BP to open a nationwide network of fuel retail outlets last week, he added.
The company’s ballooning debt(a balloon payment is required at the end of the term to repay the remaining principal balance of the loan) after spending as much as $50 billion to propel its telecom business to the top position in India within three years of starting operations, surpassing Vodafone Idea Ltd and Bharti Airtel Ltd. However, as a part of the proposed deal, Saudi Aramco will also supply 500,000 barrels per day of crude oil on a long-term basis to RIL’s Jamnagar refinery.
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