India’s Reliance Industries’ plans to sell a 20% stake in its oil-to-chemical business to the world’s top oil exporter Saudi Aramco has been delayed. The operator of the world’s biggest refining complex, Reliance had declared a $15 billion agreement with Saudi Aramco last year to cut its debts.
The Aramco deal was expected to be concluded by March 2020.
“Due to unforeseen circumstances in the energy market and the COVID-19 situation, the deal (with Saudi Aramco) has not progressed as per the original timeline,” Mukesh Ambani told shareholders on Wednesday.
In January, Reliance joint chief financial officer V Srikanth said the deal would be completed in the next few months without specifying any definitive timeline.
Over the last several months, Reliance Industries has raised substantial investments from a group of high-profile organizations including Facebook, Intel and Qualcomm for its digital arm Jio Platforms which has helped the firm to become net-debt free.
Global search giant Google also joined the long list of investors with a $4.5 billion investment in Jio for a 7.7% stake.
Mr. Ambani remarked, “Our equity requirements have already been met. Nevertheless, we at Reliance value our over two-decade-long relationship with Saudi Aramco and are committed to a long-term partnership.”
Reliance is expected to spin off-its oil-to-chemical business into a separate subsidiary after regulatory permission to aid the Aramco partnership opportunity. “We expect to complete this process by early 2021,” Mr. Ambani stated.
Reliance had also received inquiries from other international companies for associations in its petrochemical business, including in utilizing petrochem feedstocks.
“These potential partnerships will help us build competitive manufacturing capacity at our existing sites to serve the deficit Indian market that still depends on large-scale imports of chemicals,” Mr. Ambani replied.
