Ambani to sell stake to Aramco, BP to make Reliance debt-free by March 2021
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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Du Plessis fifty, bowlers carry RCB to four-wicket win over GT
Bengaluru, May 4: Royal Challengers Bengaluru pressed the self-destruction button halfway but a blazing fifty by captain Faf du Plessis had enough torque in it to carry them to a four-wicket over Gujarat Titans in their IPL match here on Saturday.
Du Plesiss (64, 23b, 10x4, 3x6) and Kohli (42, 27b, 2x4, 4x6), who added 92 runs in just 35 balls for the opening wicket, were in prime touch as Royal Challengers moved past a frail target of 148, braving some nervy moments, most of it their own creation.
The win also lifted RCB to seventh place on the table with eight points from 11 matches, and kept their mathematical chances of making it to the play-offs alive.
Du Plessis and Kohli dealt in boundaries as the home side racked in 92 runs in Power Play, that contained 10 fours and seven maximums.
Both Du Plessis and Kohli were severe on all GT bowlers, as the latter began the butchering with two sixes off pacer Mohit Sharma in the first over.
Du Plessis was in no mood to play the role of a sidekick as he waded into left-arm pacer Josh Little with a sequence of 4, 6, 4, 4 in the second over that produced a total of 20 runs.
The Titans introduced IPL debutant left-arm spinner Manav Suthar in the hope of containing Kohli at least, but the ploy was foiled spectacularly.
The RCB talisman showed his increasing comfort against spin, clobbering Suthar for two successive sixes.
Du Plessis reserved his punitive blade for Mohit, whom he carted around for four fours in the fifth over, as the South African reached fifty in just 18 balls before falling to Little.
RCB entered a phase of struggle from there as they lost last match centurion Will Jacks, Rajat Patidar, Glenn Maxwell and Cameron Green between the sixth and 10th overs for just 20 runs.
Little (4/45) and spinner Noor Ahmad (2/23) were the chief perpetrators as RCB slipped from 92 for 1 to 112 for five.
Ahmad soon ousted Kohli as RCB were 117 for six but Dinesh Karthik (21 not out, 12b) was cool under pressure as RCB notched their overall fourth and third win in a row of this season.
Before RCB batsmen joined the party, their bowlers came up with an immaculate effort on a supportive pitch to bowl GT to a modest 147.
There were a couple of good partnerships – 61 between David Miller and Shahrukh Khan and 44 by Rahul Tewatia and Rashid Khan – but the Titans lacked that one big innings or a stand that could have given them a firmer grip on the match.
In fact, they seemed distinctly incapable of accelerating even in the Power Play as their top-order batters struggled against RCB pacers, Mohammed Siraj (2/29) and Yash Dayal (2/21) who stuck to a wonderful length.
That GT managed to strike just two fours in Power Play offered ample evidence to their struggle and RCB bowlers’ accuracy.
The Gujarat side’s Power Play score of 23 for three was the lowest in the segment this season, and it was mainly due to Siraj’s domination upfront.
He consumed an out-of-form Wriddhiman Saha with a fine outswinger which the GT opener wafted to Dinesh Karthik behind the stumps.
Shubman Gill followed soon as his attempted swat to the on-side off Siraj took a leading edge and ended in the hands of Vysakh Vijayakumar at deep point.
Green fetched the third wicket for RCB in the Power Play when he jettisoned in-form B Sai Sudharsan, whose feeble pull close to the body was snaffled by Kohli at mid-off.
Miller (30, 20b) and Shahrukh (37, 24b) tried their best to drag GT out of the woods with a well-paced 61-run alliance off 37 balls for the fourth wicket.
Miller, who was fortunate to get dropped on 23 off Green by Karn Sharma, played archetypal power shots.
He punished leg-spinner Karn for a couple of sixes – a pull and a loft over extra cover – but fell to the same bowler when a miscued heave was grabbed by Maxwell at deep.
But a bigger misfortune was in store for the visitors as Shahrukh, who backed up a tad too far to Rahul Tewatia’s soft drop, could not beat a throw from Kohli to the non-striker’s end.
For the sixth-wicket, Tewatia (35, 21b) and Rashid (18, 14b) added 44 off 29 balls, but the latter’s desire to be innovative against Yash Dayal saw the ball crashing onto the stumps.
Tewatia, who punished Karn for 18 runs (4, 6, 4, 4) in the 16th over, departed soon.
