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<ul><li><keyword id="6484187" type="General" weightage="20" keywordseo="ril" source="Orion">RIL</keyword> decided to 're-evaluate' Saudi Aramco's $15 billion investment in its O2C arm. </li><li> The current application with the NCLT for segregating the O2C business from RIL is being withdrawn.</li><li>RIL shall continue to be Saudi Aramco's preferred partner for investments in the private sector in India </li></ul><keyword id="10926" type="General" weightage="20" keywordseo="reliance" source="Orion">Reliance</keyword> Industries Limited (RIL) and Saudi Aramco have mutually agreed to re-evaluate the proposed investment of the latter in RIL's 'O2C' (Oil to Chemical). Consequently, the current application with the NCLT (National Company Law Tribunal) for segregating the O2C business from RIL is being withdrawn. In August 2019, both the companies had signed a non-binding Letter of Intent for a potential 20 per cent stake acquisition by Saudi Aramco in the O2C business of RIL. "Over the past two years, both the teams made significant efforts in the process of due diligence, despite Covid restrictions. This has been possible due to the mutual respect and long-standing relationship between the two organisations," RIL said in a statement on Friday. "Reliance recently unveiled its plans for the 'New Energy &amp; Materials' businesses by announcing the development of the Dhirubhai Ambani Green Energy Giga Complex at Jamnagar. It will be among the largest integrated renewable energy manufacturing facilities in the world," it added. Jamnagar, which accounts for a major part of the O2C assets, is envisaged to be the centre for Reliance's new businesses of 'Renewable Energy &amp; New Materials', supporting the net-zero commitment. "Due to the evolving nature of Reliance's business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context. Consequently, the current application with NCLT for segregating the O2C business from RIL is being withdrawn," the statement said. "The deep engagement over the last two years has given both Reliance and Saudi Aramco a greater understanding of each other, providing a platform for broader areas of cooperation. Saudi Aramco and Reliance are deeply committed to create a win-win partnership and will make future disclosures as appropriate," it added. According to the statement, RIL shall continue to be Saudi Aramco's preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco &amp; SABIC for investments in Saudi Arabia. "Saudi Aramco and RIL have a very deep, strong and mutually beneficial relationship, which has been developed and nurtured by both the companies over the last 25 years. Both are committed to collaborate and work towards strengthening the relationship further in the years ahead," the statement said. SEE ALSO <a href="https://www.businessinsider.in/thelife/news/tesla-hit-with-new-sexual-harassment-lawsuit-alleging-the-company-operates-like-a-frat-house/articleshow/87808968.cms" data-type="tilCustomLink">Tesla hit with new sexual harassment lawsuit alleging the company operates like a 'frat house'</a> <a href="https://www.businessinsider.in/investment/news/binances-ceo-is-buying-his-1st-home-in-crypto-friendly-dubai-and-confirms-its-us-affiliate-will-close-a-multi-million-dollar-funding-round-soon/articleshow/87807571.cms" data-type="tilCustomLink">Binance's CEO is buying his 1st home in crypto-friendly Dubai and confirms its US affiliate will close a multi-million dollar funding round soon</a> <a href="https://www.businessinsider.in/politics/world/news/kamala-harris-will-become-the-first-woman-to-have-control-over-us-nuclear-weapons-but-only-briefly/articleshow/87806057.cms" data-type="tilCustomLink">Kamala Harris became the first woman to have control over US nuclear weapons, but only briefly</a>

Reliance's $15 billion deal with Saudi Aramco has been called off

<keyword id="6355199" type="ORGANIZATION" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> Ltd (RIL), India's largest company, on Thursday said its board has approved hiving off its USD 75 billion worth oil-to-chemicals business into a separate division to enable the sale of 20 per cent stake in the unit to Saudi national oil company Aramco. The hiving off will be subject to the approval of the National Company Law Tribunal. After the approval, the oil-to-chemical (O2C) business will become a separate vertical with independent balance sheet just like the conglomerate's digital arm, Jio Platforms. RIL had organised all its digital businesses including Reliance Jio that has 388 million telecom subscribers, into Jio Platforms. It last week agreed to sell a 9.99 per cent stake in Jio Platforms to <keyword id="319320" type="COMPANY" weightage="20" keywordseo="Facebook-Inc">Facebook Inc</keyword> for USD 5.7 billion. RIL Board "approved a Scheme of Arrangement for transfer of O2C Undertaking of the company to <keyword id="9147221" type="COMPANY" weightage="20" keywordseo="reliance-o2c-ltd">Reliance O2C Ltd</keyword> as a going concern on slump sale basis for a lump sum consideration equal to the income tax net worth of the O2C Undertaking as on the appointed date of the Scheme," it said in its fourth-quarter earnings statement. O2C undertaking of the company comprises entire oil-to-chemicals business of the company consisting of refining, petrochemicals, fuel retail and aviation fuel (majority interest only) and bulk wholesale marketing businesses together with its assets and liabilities. "The scheme is subject to necessary statutory/regulatory approvals under applicable laws including approval of National Company Law Tribunal," it added. In August last year, RIL head <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword> had announced initial agreements to sell a 20 per cent stake in the oil-to-chemical business to <keyword id="152170" type="COMPANY" weightage="20" keywordseo="Saudi-Aramco">Saudi Aramco</keyword> for an asking of USD 15 billion. The deal 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 Plc of UK for Rs 7,000 crore. The deal, which valued the oil-to-chemical business at USD 75 billion, was to close by March 2020 but it is now expected to close within the current calendar year. Reliance has pivoted away from energy to the new economy. But refining and petrochemicals are cash cows for Reliance and still account for the bulk of its EBITDA. As part of the August deal, Saudi Aramco will supply 500,000 barrels per day (25 million tonnes a year) of crude on a long-term basis to RIL's Jamnagar refinery complex (more than a third of the 1.36 million bpd refining capacity). The deals give Aramco and BP access to the fastest-growing refined fuels market in the world. Market analyst firm Bernstein in a recent report had stated that it expects RIL to grow their petrochemical and refining business given the secular growth opportunities. "While bears will argue that Reliance is stepping away from energy to digital, we see this deal as an opportunity to expand the downstream business in India with a solid partnership. For Aramco, the deal provides direct access to what is widely expected to be the fastest-growing refined oil product market over the next 20 years," it said. "For Reliance, it provides cash to fund the expansion of their digital business and further expansion of downstream capacity with an experienced partner." While talks with Aramco continue, the BP deal has been finalised. Reliance's existing 1,400-odd petrol pumps, as well as 31 aviation fuel stations, will be transferred to the new joint venture where BP will hold 49 per cent equity stake. Reliance will hold the balance 51 per cent in the entity, which aims to expand the retail network to 5,500 petrol pumps in the next five years. This is the third joint venture between Reliance and BP since 2011. BP had in 2011 bought 30 per cent stake in 21 oil and gas exploration and production blocks of Reliance for USD 7.2 billion. At that time, another 50:50 joint venture, <keyword id="838593" type="COMPANY" weightage="20" keywordseo="India-Gas-Solutions">India Gas Solutions</keyword>, was set up for sourcing and marketing gas in India. The country currently has 69,109 petrol pumps, with public sector retailers owning 61,811. PSU retailers have plans to double this network and have already started appointing dealers. Russia's Rosneft-backed Nayara Energy, formerly Essar Oil, has 5,702 petrol pumps and has plans to scale them up to more than 7,000 in two-three years. Royal Dutch Shell has 189 outlets and is slated to add 150-200 more petrol pumps. BP had in 2016 received a licence from the government to set up 3,500 petrol pumps in India. French energy giant Total SA too is keen on entering the Indian retail market and has tied up with Adani Group for the same. The Saudi national oil company, along with its partner UAE's Abu Dabhi National Oil Co (ADNOC) has taken a 50 per cent stake in a planned USD 60-billion mega refinery-cum-petrochemical complex in Maharashtra by state-owned oil companies, and has a bullish outlook on India's energy demand and is keen on investing here. Reliance operates two refineries in Jamnagar, Gujarat, with a total capacity of 68.2 million tonnes per annum. It plans to expand its only-for-exports special economic zone (SEZ) refining capacity to just over 41 million tonnes from the current 35.2 million tonnes. Saudi Arabia, on the other hand, is keen to get a foothold in the world's fastest-growing fuel market to get a captive customer for the crude oil it produces. Crude oil is the basic raw material for the manufacturing of petrochemicals. Saudi Aramco is also keen on retailing fuel in India. A refinery in India can also be a base for it to export fuel to deficit countries in Europe and the Americas. India has a refining capacity of 249.9 million tonnes, which exceeded the demand of 213.7 million tonnes. See also: <a href="https://www.businessinsider.in/business/corporates/news/ril-rights-issue-ratio-pricing-and-value/articleshow/75474592.cms">Mukesh Ambani offers Reliance Industries shareholders 1 new share for every 15 held⁠— at a price 14% below market value</a> <a href="https://www.businessinsider.in/business/news/reliance-retails-operating-profit-grows-nearly-20-in-the-latest-fourth-quarter/articleshow/75474722.cms">Reliance Retail’s operating profit grows nearly 20% in the latest fourth quarter⁠⁠</a> <a href="https://www.businessinsider.in/business/news/tech-mahindras-net-profits-see-a-massive-32-drop-even-as-its-digital-business-is-treading-water-amidst-the-covid-19-crisis/articleshow/75472198.cms">Tech Mahindra’s net profits see a massive 32% drop even as its digital business is treading water amidst the COVID-19 crisis</a>

Reliance to hive off $75 billion oil-to-chemicals business into separate unit for sale to Aramco

New Delhi, May 4 () Moody's Investors Service on Monday said Reliance Industries' Rs 53,100 crore rights issue is credit positive as earnings will decline because of economic shutdowns.Last week, Reliance announced it will raise Rs 53,100 crore through a rights equity offering.Also, the company announced an investment of Rs 5,656 crore by Silver Late in Jio Platforms, the digital services business of RIL."This is in line with the company's target to reduce its net debt to zero by March 31, 2021. The proceeds from the rights issue will reduce RIL's net debt by about USD 7.8 billion and is credit positive," Moody's said in a note.Along with the previously announced asset sales to Facebook, Inc and BP Plc, RIL expects to generate net proceeds of Rs 1.1 lakh crore, which will reduce its net debt by the same amount."The total net debt reduction from completion of these transactions will lower RIL's reported net debt, which was Rs 1.6 lakh crore (USD 21.4 billion) as on March 31, 2020, by about 68 per cent and will be equivalent to 1.1x its reported EBITDA of Rs 1 lakh crore for the fiscal year ended March 31, 2020," it said.In addition, RIL also announced that it has started the process to carve out its oil-to-chemical (O2C) business as a separate subsidiary in order to facilitate the previously announced 20 per cent stake sale in that business to Saudi Arabian Oil Company (Saudi Aramco).Despite the coronavirus outbreak and lower oil prices, RIL confirmed that the due diligence process for the transaction is ongoing."This increases the likelihood of the transaction going ahead as announced in August 2019," the rating agency said, adding the transaction with Saudi Aramco values the O2C business at USD 75 billion and can potentially result in USD 12-15 billion of cash proceeds for RIL, depending on the amount of debt at the O2C business after the reorganization.Reliance last week approved the biggest-ever rights issue of Rs 53,100 crore at Rs 1,257 per share.The company had reported a 10.5 per cent increase in its reported EBITDA for the fiscal year ended March 31, 2020, as compared to a year ago.While the economic shutdowns due to coronavirus outbreak resulted in a decline in earnings from RIL's O2C and retail businesses for the quarter ended March 2020, its earnings from its digital services continued to grow."We expect the earnings from its O2C and retail business to see a steeper decline in the quarter ending June 2020 as India's economy is scheduled to be under shutdown for at least 45 days in this quarter. An earnings recovery for these segments will depend on the timing of resumption of economic activity, which remains uncertain at this stage," it said.Assuming the economic activity to resume by middle to end of May 2020, the rating agency expected RIL's consolidated EBITDA to decline 10-12 per cent in FY2021 as compared to FY2020. However, the EBITDA is expected to return to FY2020 levels in FY2022 as improved demand in combination with low oil prices will result in higher earnings for the O2C segment, while the earnings growth for retail will resume."RIL's recent foray into online retail through its partnership with Whatsapp and Facebook could result in a further boost in its retail earnings, which is currently not factored in our projections," Moody's said. ANZ BAL

Rights issue credit positive for Reliance; to result in debt reduction: Moody's

Mumbai, Jul 15 () Asia's richest man Mukesh Ambani on Wednesday said his group's planned stake sale in oil-to-chemical business to Saudi Aramco for an asking of USD 15 billion has not progressed as per original timelines due to COVID-19. "We value our two-decade relationship with Aramco and are committed to a long-term partnership," Ambani said at Reliance Industries' annual general meeting. He, however, did not say if the deal was on track or give a new timeline for its completion. "Deal with Saudi Aramco hasn't progressed per original timeline due to unforeseen situation in the energy market and COVID-19 situation," he said. Reliance will be spinning off the oil-to-chemical (O2C) business into a separate subsidiary "to facilitate multiple partnership opportunities," he said. "We expect to complete this process by early 2021," he said. Ambani in August last year had announced talks for sale of 20 per cent stake in the O2C business, which comprises of RIL's twin oil refineries at Jamnagar in Gujarat and petrochemical assets, to the world's largest oil exporter, Saudi Aramco. The deal was to be concluded by March 2020 but was delayed. "Reliance is working to complete the contours of a strategic partnership with Saudi Aramco," Ambani had said in the firm's latest annual report without giving timelines. The partnership with Aramco would give Jamnagar refineries "access to a wide portfolio of value-accretive crude grades and enhanced feedstock security for higher oil-to-chemicals conversion," he had said in the annual report. With a stake, Aramco would not just have a share in one of the world's best refineries and the largest integrated petrochemical complex but also access to one of the fastest-growing markets -- a ready-made market for 5 lakh barrels per day of its Arabian crude and offering a potentially bigger downstream role in future. Besides refineries and petrochemical plants, the O2C business also comprises a 51 per cent stake in the fuel retailing business. It, however, does not include the upstream oil- and gas-producing assets such as the flagging KG-D6 block in the Bay of Bengal. Ambani said Reliance has concluded the sale of a 49 per cent stake in its fuel retailing venture to BP for Rs 7,629 crore. RIL's refineries are one of the most complex in the world, allowing it to earn a significant premium to the benchmark Singapore gross refining margin. Its petrochemical complexes rank among the biggest in the world, whose dependency on outside raw materials is minimal. RIL has leadership positions both in the domestic polymer and polyester markets. The O2C business will be carved out into a division where Aramco will have an economic interest. It will have its own management and accounts just like the conglomerate's digital arm, Jio Platforms. RIL had organised all its digital businesses including Reliance Jio that has 388 million telecom subscribers, into Jio Platforms. It has sold 32.84 per cent stake in Jio Platforms Ltd - the unit that houses India's youngest but largest telecom firm Jio Infocomm and apps. In total, Jio has raised Rs 1,52,055.45 crore. RIL was to receive the proceeds from the Aramco stake sale in three stages - 50 per cent on closing, another 25 per cent after one year of closing and the balance 25 per cent in the following year. ANZ ANZ BAL BAL

Deal with Saudi Aramco not progressed as per timelines: Ambani

Conglomerate <keyword id="10926" type="General" weightage="20" keywordseo="reliance" source="Orion">Reliance</keyword> Industries Ltd (RIL) on Friday reported a rise of 46 per cent growth in its year-on-year consolidated net profit for the quarter ended September 30, 2021. The net profit, on a YoY basis, rose to ₹15,479 crore. In a regulatory filing, the company reported that its consolidated gross revenue for the quarter rose to ₹191,532 crore, higher by 49.2 per cent. Besides, the consolidated EBITDA for the quarter rose by 30 per cent to ₹3 0,283 crore. On a standalone basis, net profit for the quarter was higher by 44.1 per cent year-on-year to ₹9,228 crore. Furthermore, the gross revenue on a standalone basis for the quarter rose by 68.8 per cent to ₹108,750 crore. "As the pandemic retreats, I am pleased that Reliance has posted a strong performance in 2Q FY22. This demonstrates the inherent strengths of our businesses and the robust recovery of the Indian and global economies," Reliance Industries Ltd Chairman and Managing Director Mukesh D. Ambani said. "All our businesses reflect growth over pre-Covid levels. Our operational and financial performance reflects sharp recovery in the retail segment and sustained growth in Oil-to-Chemicals (O2C) and Digital Services business." Ambani said: "Our O2C business benefited from sharp recovery in demand across products and higher transportation fuel margins." "Reliance Retail continues to grow on the back of rapid expansion of both physical stores and digital offerings resulting in healthy growth in revenues and margin expansion. Jio, our digital services business, continues to transform the broadband market in India and set new benchmarks for the industry." He further said that RIL continues to make steady progress in accelerating its foray into new energy and new materials business. "Our partnership approach and the desire to bring India to the forefront of global transition to clean and green transition is underscored by our recent investments in some of the best companies in the world in the solar and green energy space." SEE ALSO <a href="https://www.businessinsider.in/business/telecom/news/reliance-confirms-jiophone-next-will-be-launched-in-time-for-diwali/articleshow/87211099.cms" data-type="tilCustomLink">Reliance confirms JioPhone Next will be launched in time for Diwali</a> <a href="https://www.businessinsider.in/retail/news/reliance-retail-reported-a-revenue-of-45450-crore-in-the-july-to-september-quarter-of-2021/articleshow/87211831.cms" data-type="tilCustomLink">Reliance Retail fails to breach its own bar even as fashion and lifestyle segment reports its highest ever quarterly revenue</a>

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Reliance's $15 billion deal with Saudi Aramco has been called off

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Reliance to hive off $75 billion oil-to-chemicals business into separate unit for sale to Aramco

PTI

Rights issue credit positive for Reliance; to result in debt reduction: Moody's

PTI

Deal with Saudi Aramco not progressed as per timelines: Ambani

PTI

Reliance Industries' net profit crosses ₹15,000 crore in September quarter

IANS

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