Mumbai: On a mission to cut debt in Reliance Industries, billionaire Mukesh Ambani on Monday announced plans to sell stakes in the firm's oil and chemicals business to Saudi oil giant Aramco and in fuel retail network to BP plc for Rs 1.15 lakh crore, and said its telecom unit Jio will begin offering fibre-based broadband services from next month.
Saudi Aramco will buy a 20 per cent stake in the oil and chemicals business of Reliance, including the 1.36 million barrels a day Jamnagar refining complex in Gujarat, for an enterprise value of USD 75 billion. BP will buy 49 per cent stake in the firm's 1,400 petrol pumps and aviation fuel selling facilities at 31 airports for another Rs 7,000 crore.
The twin deals along with deleveraging of telecom arm Jio's infrastructure assets will help Reliance become "a zero-net debt company within the next 18 months, that is by March 31, 2021", Ambani said at the company's annual general meeting (AGM) here.
Reliance as a whole has an enterprise value of about USD 134 billion, including telecom and retail businesses.
The company, which had a net debt of Rs 1,54,478 crore as on March 31, 2019, also intends to list its retail and telecommunication units within five years, he said.
A zero-net debt company would mean that borrowings fall below cash reserves with the firm, a level Reliance hasn't seen since 2013. It had an outstanding debt of Rs 2,88,243 crore as on June 30, 2019, and a cash balance of Rs 1,31,710 crore as on June 30.
Reliance has invested Rs 5.4 lakh crore, mostly in debt, in the last five years in the expansion of its oil to chemicals business, creating 4G wireless telecom network that offers high-speed internet and in setting up India's largest retail chain.
The debt levels had raised concerns among analysts including at Credit Suisse Group AG which felt the ballooning borrowings would weigh on growth.
Ambani sought to allay those fears.
"With these initiatives, I have no doubt that your company will have one of the strongest balance sheets in the world," he said. "We will also evaluate value unlocking options for our real estate and financial investments."
Announcing a 'new Reliance', Ambani said the Saudi investment is "the biggest foreign investment in the history of Reliance" and "among the largest foreign investments in India."
BP had previously bought a 30 per cent stake in 21 oil and gas blocks of Reliance for USD 7.2 billion in 2011.
The deal with Aramco covers all of Reliance's refining and petrochemicals assets as well as the remainder of stake the firm has in fuel retailing business after selling 49 per cent to BP, he said.
The world's biggest crude producer, Aramco will also supply 5,00,000 barrels of crude oil to Jamnagar refineries, roughly double of the amount Reliance buys from Saudi Arabia currently.
Stake in Reliance business is apart from 50 per cent interest Aramco along with UAE's ADNOC is picking up in a planned USD 60 billion refinery on the west coast of India. These investments are part of Aramco's plan to double oil processing capability under its belt to 10 million barrels a day by 2030, locking in friendly buyers for the Kingdom's crude.
The deal is subject to due diligence, definitive agreements, and regulatory and other approvals, Ambani said.
Later talking to reporters, Reliance executive director P M S Prasad said the Aramco deal is targeted to be completed by March 2020. "Within five years, the oil-to-chemicals business will be carved out as an unlisted subsidiary of Reliance and will operate as a business division of RIL with the Aramco having 20 per cent economic interest."
At the AGM, Ambani announced roll out of fibre-based fixed-line broadband services from September 5, offering internet speed of at least 100 Mbps, free voice calls for life and HD television sets given for free along with the connection that would come for as low as Rs 700 per month. Calls will be free on fixed lines phones to anywhere in the country.
Reliance has received "strong interest" from strategic and financial investors for its consumer businesses -- telecom venture Jio and Reliance Retail, he said without giving details.
With these initiatives, Reliance will have one of the strongest balance sheets in the world.
"As we achieve our zero-net debt target, I assure you, my dear shareholders, that we will reward you abundantly through higher dividends, periodic bonus issues and other means, and at a more accelerated pace than any time in our history," he said.
With over 340 million mobile phone subscribers, Jio is now venturing into optical-fibre-based fixed-line broadband service, called JioFiber.
"Today, I want to announce that starting September 5 of this year - on the third anniversary of Jio's launch - we are launching JioFiber services on a commercial basis," he said.
Watched by his mother Kokaliben and children, he said as India is getting transformed into 'New India', "Reliance will also transform itself into New Reliance".
"We also have large and valuable real estate assets, and have a strong portfolio of financial investments," he said. "On the strength of our existing and new growth engines, I am very confident that we can grow this by 15 per cent annually over the next five years.
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Jaipur, Mar 28: Young Riyan Parag showed why he is considered a precocious talent as he struck a stunning 84 not out off 45 balls to set up a 12-run win for Rajasthan Royals against Delhi Capitals in their IPL match here on Thursday.
Sent in to bat, RR were reduced to 36 for 3 in the eighth over but the 22-year-old Parag single-handedly took the home side to 185 for 5 with a magnificent unbeaten knock studded with seven fours and six sixes.
Parag, who was promoted to number 4 by the team management this season and made 43 in the previous match, took 25 runs off veteran South African pacer Anrich Nortje with scores of 4, 4, 6, 4, 6, 1 in the final over to hit his highest T20 score.
Chasing 186 for a win, DC could only manage 173 for 5 in 20 overs though South African youngster Tristan Stubbs (44 not out off 23 balls) kept them in the hunt till the final over from which they needed 17 runs.
Avesh Khan conceded just four runs to help RR win their second consecutive match.
South African pacer Nandre Burger and Yuzvendra Chahal took two wickets apiece to also contribute in the RR win.
"Definitely disappointed. The best thing to do from here is to learn from it. The bowlers did well through the 15-16 overs. But the batters did well at the death, hopefully we do better in the next game," DC skipper Rishabh Pant said.
DC were reduced to 34 for 2 in the fourth over with Burger taking two wickets in three balls in a fine display of fast bowling.
Burger, who was brought in as Impact Sub for Shimron Hetmyer, dismissed opener Mitchell Marsh (23 off 12 balls) and Ricky Bhui (0) in the fourth over.
DC captain Rishabh Pant came out to bat at the fall of Bhui's wicket and along with senior batter David Warner built the innings without taking too much risk. Delhi were 89 for 2 at the halfway stage.
Warner was the more aggressive one as he got the boundaries to keep DC in the hunt. The senior Australian batter fell one run short of his fifty courtesy a brilliant diving catch by Sandeep Sharma off the bowling of Avesh in the 12th over.
Warner and Pant were involved in a crucial 67-run partnership for the third wicket.
Playing in his 100th IPL match and 14 months after a horrible car crash, Pant tried to build the innings with occasional boundaries. But he got out for a 26-ball 28 as Chahal induced a faint lower edge for Sanju Samson to do the rest behind the stumps in the 14th over.
The asking rate shot up to more than 13 runs an over and DC needed 66 from the last five overs.
Stubbs kept DC in the game with two consecutive sixes off Ravichandran Ashwin in the 17th over, but in the end the Delhi side were short by 12 runs.
They needed 34 runs from the final two overs which they could not get. It was DC's second consecutive loss.
Earlier, Parag shared 54 and 52 runs respectively with Ravichandran Ashwin (29) and Dhruv Jurel (20) after RR made a shaky start.
Royals captain Samson struck three consecutive boundaries in the fourth over bowled by pacer Mukesh Kumar before nicking a Khaleel Ahmed delivery two overs later to Pant to get out for 15.
RR were 30 for 2 by then as Mukesh had given DC their first breakthrough with the wicket of Yashasvi Jaiswal (5).
The Royals were in more trouble after wrist spinner Kuldeep Yadav literally forced his captain Pant to take a review, which later proved to be successful, to dismiss Englishman Jos Buttler for an LBW decision.
Ashwin came out to bat at number five and he lofted a Kuldeep delivery for a six to help RR reach 58 for 3 at halfway stage. He gave Nortje even a harsher treatment with two sixes in the next over that yielded 15 runs.
Ashwin, however, holed out to Tristan Stubbs near the boundary ropes for a 19-ball 29.
Parag then made his presence felt, striking two boundaries and a six off Ahmed to take RR past 100 in the 15th over.