News Code : 44835

Petrotahlil - RIL’s plan to sell stake in its oil-to-chemicals business to Saudi Aramco has “not progressed” as envisaged “due to unforeseen circumstances in the energy market”, said chairman Mukesh Ambani at the company’s annual shareholder meeting. The urgency to conclude the transaction with Saudi Aramco has eased as RIL’s “equity requirements have already been met”.

While Ambani didn’t give any new timeline for the completion of the deal with Saudi Aramco, the chairman said RIL has been “approached by global companies for strategic partnerships in the petrochemical business”. He, however, didn’t name any company.

Last year, Ambani had announced that Saudi Aramco would acquire a 20% stake in the oil-to-chemicals business, valued at $75 billion including debt, with the deal to be closed by March 2020. “Due to unforeseen circumstances in the energy market and the Covid-19 situation, the deal has not progressed as per the original timeline,” Ambani told shareholders. “Nevertheless, we at Reliance value our over two-decade-long relationship with Saudi Aramco and are committed to a long-term partnership.”

RIL has been sourcing crude oil from Saudi Aramco for many years and it recently sold a 2.32% stake in Jio to the Kingdom-managed Public Investment Fund (PIF) for Rs 11,367 crore ($1.5 billion). PIF is managed by Yasir al-Rumayyan, who is also the chairman of Saudi Aramco. RIL will approach the National Company Law Tribunal to spin off the oil-to-chemicals business into a separate subsidiary. The process, expected to be completed by early 2021, is to “facilitate multiple partnership opportunities” in the business.

“The strategic partnerships will help us build competitive manufacturing capacity at our existing sites,” said Ambani, adding that this will help RIL “serve the deficit Indian market that still depends on large-scale imports of chemicals”. RIL is not in a hurry to conclude the deal with Saudi Aramco in the petrochemicals business as it has raised more than Rs 2 lakh crore through other routes to pare debt. It has sold shares in its telecom and retail fuel units as well as sold its shares to existing shareholders, raising enough capital to eliminate its net debt. RIL’s deal with Saudi Aramco has slowed due to differences over structure and other issues. The company will, however, continue to pursue a partnership with Saudi Aramco, said Ambani.

The Times of India 

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