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<ul><li>Share price of <keyword id="6484187" type="General" weightage="20" keywordseo="ril" source="Orion">RIL</keyword> has doubled between the announcement of the deal and its recent peak on October 14.</li><li>In August 2019, the companies had signed a non-binding letter of intent for a potential 20% stake by Saudi Aramco in RIL.</li><li>On November 22, shares of RIL fell nearly 4% as the deal has been put on hold for now.</li></ul>The much anticipated deal between Reliance Industries (RIL) and Saudi Aramco has been <a href="https://www.businessinsider.in/business/news/reliances-15-billion-deal-with-saudi-aramco-has-been-called-off/articleshow/87811630.cms">put on hold</a> and the disappointment of investors is being reflected in the share price of RIL. Both the companies, on November 20, decided to re-evaluate the proposed investment of Saudi Aramco in <keyword id="3820" type="General" weightage="20" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword>’s oil-to-chemical conglomerate. Meanwhile, shares of RIL have doubled between the announcement of the deal and its recent peak on October 14. <div type="image" title="ril char" height="900" width="1200" msid="87842195" hostid="261"></div> In August 2019, both the companies had signed a non-binding letter of intent for a potential 20% stake by Saudi Aramco in RIL. Five instances when RIL and Saudi Aramco gave investors hope of a big ticket deal <ul><li>August 2019</li></ul>RIL and Saudi Aramco signed a non-binding letter of intent in August 2019 for a potential 20% stake acquisition by Saudi Aramco in the oil-to-chemical business. <ul><li>August 2020</li></ul>In a post-earnings call of Saudi Aramco with analysts, its chief executive Amin Nasser said, "With regard to the Reliance deal, all I can say at this stage, it's going through due diligence. So, depending on the due diligence, we will make our decision after we complete the due diligence on that deal," said Nasser. <ul><li>June 2021</li></ul>Mukesh Ambani announced that the proposed deal with Saudi Aramco will likely be finalised this year during the 44th Annual General Meeting (AGM) on June 24. “As an important part of this vision of achieving accelerated growth, we look forward to welcoming Saudi Aramco as a strategic partner in our O2C business," said Ambani. <ul><li>July 2021</li></ul>Investors' hopes of a deal to happen soon were raised after RIL appointed Saudi Aramco’s Chairman Yasir Al-Rumayyan as an independent director of the company effective from July 19, 2021. <ul><li>August 2021</li></ul>CEO of Saudi Aramco Amin Nasser said the company is still working on the deal to invest in Reliance Industries, as reported by Bloomberg. However, RIL clarified that it will 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 is one of the largest petroleum and natural gas companies in the world, based in Dhahran, while SABIC (Saudi Basic Industries Corporation), a subsidiary of Saudi Aramco, is into chemical manufacturing. Analysts at JP Morgan <a href="https://twitter.com/CNBCTV18Live/status/1462596690041470984/photo/1">reportedly </a>said that the development is a “clear sentiment negative”, but will have limited impact on RIL’s financials. Besides, a significant deleveraging (debt reduction) has already been done by the oil-to-chemical major, which is positive, according to JP Morgan. The global brokerage firm has a ‘neutral’ rating on the stock as it expects the share price to rise 7% at ₹2,575. Besides, RIL has shifted its focus to its new energy business at Jamnagar, which it aspires to make it among the largest integrated renewable energy manufacturing facilities in the world. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/paytm-has-lost-8-billion-in-valuation-in-two-days-of-listing/articleshow/87840891.cms">Paytm has lost $8 billion in valuation in two days of listing</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/airtels-popular-prepaid-plans-may-now-cost-you-up-to-25-more/articleshow/87840177.cms">Airtel’s popular prepaid plans may now cost you up to 25% more</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/sensex-tanks-over-400-points-in-early-trade-nifty-trading-at-17764-reliance-industries-maruti-bajaj-finance-kotak-bank-and-bajaj-finserv-top-losers/articleshow/87841278.cms">Sensex tanks over 400 points in early trade, Nifty trading at 17,764 — Reliance Industries, Maruti, Bajaj Finance, Kotak Bank and Bajaj Finserv top losers</a>

Reliance Industries’ investors dump shares after Mukesh Ambani's Aramco deal fails after 27 months of negotiations

<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

<ul class="summary-list"><li>Saudi Arabia is getting serious about its plans to be a world leader in AI.</li><li>Last week, it hosted an AI summit with execs from top Western firms and unveiled a data center deal.</li></ul>When <a target="_blank" class="" href="https://www.businessinsider.com/saudi-arabia-ruler-mbs-leveraging-chaos-us-weapon-contracts-salman-2024-9">Mohammed bin Salman</a> presided over Saudi Arabia's inaugural artificial intelligence summit at the start of the decade, his message was bold: as crown prince, he had <a target="_blank" href="https://www.spa.gov.sa/w1433658">"a clear ambition to position the Kingdom as a model nation in AI."</a>Four years on, it has become increasingly evident that those weren't just empty words from the 39-year-old royal, who is next-in-line to the throne.In recent months, Saudi Arabia has hosted a flurry of high-profile events, leaders, and dealmaking from the AI world. It's a sign that the country is serious about stepping up its plans to make its desert kingdom a top destination for AI companies in search of capital and opportunities.Last week, for instance, the country held the third edition of the <a target="_blank" href="https://globalaisummit.org/en/Pages/Speakers.aspx">Global AI Summit</a>, which debuted in 2020. This year's showcase featured speakers from top AI companies in the West, such as Nvidia, Qualcomm, Google, Microsoft, and OpenAI rival Cohere.The summit also spotlighted a new tie-up announced last week between Mountain View-based chip firm <a target="_blank" class="" href="https://groq.com/unleashing-the-power-of-fast-ai-inference-groq-and-aramco-digital-partner-to-establish-world-leading-data-center/">Groq and a subsidiary of the $1.7 trillion state oil firm Saudi Aramco</a> — a deal aimed at building "the largest AI inference data center."<div type="image" title="Saudi Aramco" height="501" width="800" msid="113400247" hostid="261" sizebytes="17726"></div>Groq, founded in 2016 by former Google engineers, has established itself as one of the more serious competitors to <a target="_blank" class="" href="https://www.businessinsider.com/meta-zuckerberg-wealth-nvidia-huang-tech-stock-ai-wealth-billionaires-2024-9">chip giant Nvidia</a> since the start of the AI boom. It specializes in chips dedicated to running AI models once they have been trained for a process known as inference, which is when AI draws conclusions based on data it has never seen before. Last month, Groq announced that it had <a target="_blank" class="" href="https://groq.com/news_press/groq-raises-640m-to-meet-soaring-demand-for-fast-ai-inference/">raised $640 million</a> from the likes of BlackRock and Cisco in a funding round valued at $2.8 billion. Its CEO, Jonathan Ross, suggested that inference would be a key focus for the sector as "training AI models" is a solved problem.For Saudi Arabia, AI doesn't just present the chance to bet big on tech's latest hype train. The kingdom, built on oil riches since the 1930s, is scrambling to diversify its economy at a time when world nations are weighing plans to reduce fossil fuel use.In particular, this need to diversify forms a critical part of Vision 2030 — a grand economic plan to bring in new revenue streams. The plan is supported by the country's sovereign wealth fund, <a target="_blank" class="" href="https://www.businessinsider.com/saudi-arabia-public-investment-fund-global-investment-spree-2024-8">the Public Investment Fund, or PIF.</a>Saudi Arabia generated a similar amount of hype around its AI ambitions in March when it held its LEAP conference. During the conference, Amazon Web Services CEO Adam Selipsky and IBM CEO Arvind Krishna spoke on the main stage with government minister Abdullah Alswaha.<div type="image" title="Amazon Web Services CEO Adam Selipsky" height="532" width="800" msid="113400245" hostid="261" sizebytes="14138"></div>AWS coupled the appearance with a <a target="_blank" href="https://press.aboutamazon.com/2024/3/aws-to-launch-an-infrastructure-region-in-the-kingdom-of-saudi-arabia">commitment to invest over $5.3 billion in Saudi Arabia</a> in the next few years to build data centers that provide the computing power required to run AI models behind generative AI applications.That same month, The New York Times <a target="_blank" class="" href="https://www.nytimes.com/2024/03/19/business/saudi-arabia-investment-artificial-intelligence.html">reported</a> that the Kingdom had set aside $40 billion for a new fund dedicated to AI investments — a move that would create the world's largest fund dedicated to the technology.As part of the fund's creation, key figures from PIF held talks with venture capital firm A16z to explore a strategic partnership. The US fund, led by Silicon Valley veterans Marc Andreessen and Ben Horowitz, has doubled down on its commitment to AI by planning to use a portion of the <a target="_blank" href="https://a16z.com/new-funds-new-era/">$7.2 billion it raised earlier this year</a> to bet on companies at the industry's vanguard.For Saudi Arabia, having access to a heavyweight investment firm like A16z could give it an efficient way of identifying AI startups and founders making the most buzz in the Bay Area, the epicenter of the generative AI boom.It's clear then that Saudi Arabia means business on AI. It is ready to shore up as much capital as it needs to build vital infrastructure for AI while courting leading companies overseas with its deep pockets.The stakes couldn't be higher. AI looks set to be one of a handful of major industries — such as tourism and sports — it is betting on to move it successfully away from oil.AI will need to be worth it for the kingdom in the long run.

Saudi Arabia just stepped up plans to court the world's AI leaders to its desert kingdom

Reliance Industries, IRCTC, Cadila and other top stocks to watch out for on November 22

Reliance Industries, Tarsons Products, Asian Paints and other hot stocks on November 26

After effectively turning debt free, <keyword id="6355199" type="COMPANY" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> (RIL) may see IPOs of its flourishing telecom arm Jio and retail business segment, unlocking additional shareholder value, Bernstein Research said in a report on Wednesday. RIL has raised USD 22.3 billion capital market through the sale of 24.7 per cent stake in <keyword id="9093411" type="COMPANY" weightage="20" keywordseo="Jio-Platforms">Jio Platforms</keyword> and USD 7 billion equity-raise. "Following the rights issues and 24.7 per cent sell down in Jio, RIL is now effectively debt free. We expect a break-up of the company in the next three-four years through the IPO of Jio and retail business segment which should further unlock shareholder value," the analyst said. Looking at the balance sheet, Reliance has significantly improved its financial position following the transactions, it said, adding that the net debt to equity will fall significantly from 0.51x in FY20 to 0.06x in FY21 which is the lowest in almost a decade. Given the USD 15 billion <keyword id="8360798" type="UNKNOWN" weightage="20" keywordseo="aramco-deal">Aramco deal</keyword> and free cash flow outlook in the next several years, net debt to equity could continue to fall beyond FY21, it said. Reliance is in talks with Aramco to sell a fifth of its USD 75 billion oil-to-chemical business. "The key question is what will Reliance do with the significant cash position? We think the priority for now is to reduce other liabilities on the balance sheet such as deferred payments and provisions which total in excess of Rs 50,000 crore," it said. Given the company's expansion into internet and retail, more investments including mergers and acquisitions seem highly likely, the brokerage said adding that refining and petchem could also see expansion with the Aramco partnership. "Overall, we expect RIL will continue to invest in growth over returning cash to shareholders," it said. While earnings will soften in FY21 due to COVID-19, the brokerage believed that RIL is at the start of a secular growth period driven by telecom, retail and new economy related business. "We estimate EBITDA for FY21 of Rs 86,000 crore, which is almost double what it was a few years ago," it said. "On our estimates, we believe that EBITDA can double again through to FY25, mainly through the growth in Jio and new business, while the energy related business will be relatively flat (assuming the 20 per cent divestment to Aramco)." It raised its price target for RIL from Rs 1,720 to Rs 1,870. "The higher valuation comes primarily from retail, media and other marketable investments on the balance sheet."

Reliance could soon be ready with the IPOs of Jio and its retail business

<ul class="summary-list"><li><keyword id="50996" type="COUNTRY" weightage="60" keywordseo="Saudi-Arabia">Saudi Arabia</keyword> is talking to a "leading global <keyword id="6357014" type="ORGANIZATION" weightage="60" keywordseo="energy">energy</keyword> company" about selling a 1% stake in <keyword id="6359072" type="UNKNOWN" weightage="60" keywordseo="oil">oil</keyword> producer Aramco, according to a CNBC report Wednesday. </li><li>Saudi Arabia's Crown Prince Mohammed bin Salman says the unnamed company is from a 'huge' country. </li><li><keyword id="152170" type="COMPANY" weightage="60" keywordseo="Saudi-Aramco">Saudi Aramco</keyword> went public in December 2019 in the world's largest IPO. </li></ul>Saudi Arabia is in talks to sell a stake in oil producer Saudi Aramco to an unnamed global energy company, according to a CNBC report Wednesday.Saudi Aramco had the world's biggest IPO when it went public in December 2019 and listed about 1.5% of its shares on Tadawul, the local stock exchange."I don't want to give any promises, but there's a discussion for the acquisition of a 1% stake by a leading global energy company," said Crown Prince Mohammed bin Salman in an interview on Saudi television, according to a translation of his Arabic comments by CNBC. He said the talks are being held with a company from a "huge" country but he did not name the company. Saudi Arabia owns more than 98% of shares in Aramco. The crown prince said talks are being held with other companies and some Aramco shares could be transferred to Saudi Arabia's sovereign wealth fund, the Public Investment Fund. Some shares may be listed on the Saudi market as well, according to the report. Aramco raised $25.6 billion through its IPO then took in an <a href="https://markets.businessinsider.com/commodities/news/saudi-aramco-sells-additional-shares-ipo-billions-greenshoe-proceeds-allotment-2020-1-1028813119">additional $3.8 billion</a> by selling more shares to investors.

Saudi Arabia in talks to sell 1% of oil giant Aramco to global energy firm, report says

<ul><li>Shares of the state-led <a href="https://markets.businessinsider.com/stocks/aramco-stock">Saudi Aramco</a> gained as much as 3.09% on Tuesday, rising with the price of crude <keyword id="6359072" type="UNKNOWN" weightage="60" keywordseo="oil">oil</keyword>.</li><li><keyword id="6356954" type="PERSON" weightage="60" keywordseo="aramco">Aramco</keyword> is trading at levels not seen since March 5, when a price war erupted between Saudi Arabia and Russia. </li><li>It's the first major oil producer to have its stock price recover from the price war. </li><li>Since, major producers have agreed to slash output, and oil demand is showing signs of recovering as economies around the world reopen from lockdowns to contain COVID-19. </li><li><a href="https://markets.businessinsider.com/stocks/aramco-stock">Watch Saudi Aramco trade live on Markets Insider</a>.</li><li><a href="https://www.businessinsider.com/">Read more on Business Insider</a>.</li></ul><a href="https://markets.businessinsider.com/stocks/aramco-stock">Saudi Aramco</a>, the most valuable company in the world, also just became the first major oil producer to see its share price rebound to trade at levels last seen before the price war. Shares of the state-led Aramco gained as much as 3.09% on Tuesday. That brought its share price back to its March 5 level, the date of the OPEC+ meeting that preceded the start of the <keyword id="51471" type="PERSON" weightage="60" keywordseo="Oil-price">oil price</keyword> war between Saudi Arabia and Russia. Aramco shares have been lifted by the price of crude oil and the company's commitment to its dividend. On May 12, the company said it would <a href="https://www.cnbc.com/2020/05/12/saudi-aramcos-profit-slides-25percent-in-the-first-quarter-as-collapse-in-oil-prices-bites.html">still pay its dividend</a> despite<a href="https://markets.businessinsider.com/commodities/news/saudi-aramco-1q-earnings-oil-price-crash-tanks-profits-2020-5-1029191225"> a slump in first quarter profits</a>.Major producers' stock prices have been roiled by the coronavirus-induced market whiplash and the depressed price of oil. As the coronavirus pandemic cratered global demand for the commodity, a price war broke out when Saudi Arabia and Russia in March failed to agree to further production cuts. Shares of <a href="https://markets.businessinsider.com/stocks/bp-stock">BP</a> are down nearly 28% from March 5 through Monday's close, while <a href="https://markets.businessinsider.com/stocks/rds-a-stock">Royal Dutch Shell</a> has shed nearly 26%. <a href="https://markets.businessinsider.com/stocks/xom-stock">Exxon Mobil's</a> stock has slumped 9.5% in the same period, and <a href="https://markets.businessinsider.com/stocks/cvx-stock">Chevron</a> has fallen nearly 5%. Read more: <a href="https://www.businessinsider.com/5-investing-themes-strategies-for-post-coronavirus-landscape-bofa-2020-5">BANK OF AMERICA: 5 main themes will shape the post-coronavirus investing landscape. Here are strategies for playing the winners and losers of each.</a>The price war threatened to push output to record levels while demand remained weighed down by the coronavirus crisis. In April, oil prices plunged into <a href="https://markets.businessinsider.com/commodities/news/us-crude-oil-wti-falls-to-21-year-low-1029106364">negative territory for the first time ever as worries about storing a supply glut arose</a>. Since, oil <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> have rebounded slowly but surely as <keyword id="47969" type="ORGANIZATION" weightage="60" keywordseo="Opec">OPEC</keyword> and its allies agreed to production cuts. In addition, as countries around the world slowly reopen their economies from lockdowns, there are signs that demand for oil will return. In China, <a href="https://markets.businessinsider.com/commodities/news/china-oil-demand-almost-back-coronavirus-levels-2020-5-1029214304">oil demand is nearing pre-coronavirus levels</a>, according to a <a href="https://www.bloomberg.com/news/articles/2020-05-18/chinese-oil-demand-is-almost-back-to-pre-virus-crisis-levels">Bloomberg report.</a> Despite the recent gains, <keyword id="152170" type="COMPANY" weightage="60" keywordseo="Saudi-Aramco">Saudi Aramco</keyword> is still down roughly <a href="https://markets.businessinsider.com/stocks/aramco-stock">5.4% year-to-date</a>.<a href="https://markets.businessinsider.com/stocks/aramco-stock"><div type="image" title="Screen Shot 2020 05 19 at 10.34.23 AM" height="1106" width="1548" msid="75832025" hostid="261"></div></a>Read the original article on <a href="https://www.businessinsider.com/saudi-aramco-stock-price-recovered-from-oil-war-first-producer-2020-5">Business Insider</a>

Saudi Aramco's stock just recovered to its level before the oil price war

Mumbai, Jan 17 () Mukesh Ambani-led Reliance Industries is unlikely to close the deal for 20 per cent stake in its oil to chemicals business to Saudi Aramco by March 31 this year, according to a senior company official.
 In August last year, the company announced its plans to sell its 20 per cent stake in its flagship chemicals and refining business to Saudi Aramco in a deal valued at USD 15 billion.
 The deal, is aimed at cutting its massive debt and secure an assured supply of crude oil to its refineries, was expected to be closed by March 31, 2020.
 "...it will not be a deal which will get done by March 31. It's a large transaction, large cross border transaction, a complex transaction and so timeline is something we have to be realistic about," its joint chief financial officer V Srikanth told reporters here.
 He, however, said that the deal is making good progress and that there is engagement across teams.
 "If you are looking for guidelines, I am not the guy to give the timelines because we are bond by confidentiality. I can't be talking about timelines. We can only say we are progressing well," Srikanth added. 
 When asked if the companies would be signing the definitive agreements by March 31, he said, "we are trying to do it, but we cannot comment on timelines without engagement with them (Saudi Aramco)."
 During the company's annual general meeting in last August, Ambani had said that the Saudi Aramco and BP deals, along with the plans of 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.
 On the company's debt reduction plans, Srikanth said, "the intensity of capex has been coming off quarter on quarter. From Rs 30,000 crore of capex in the first quarter, it has reduced to Rs 19,000 crore in second to Rs 14,000 crore in the third. This is in line with what we had already said that the projects are getting completed, like the Jamnagar expansion, the Jio related capex is already done, and so this is the way it is going to be.
 "So we are earning more than what we are spending so its going to translate in reduction in levels of debt. Our broader target is to be debt free by FY2021," he added.
 The company's net debt levels have reduced from Rs 1.57 lakh crore in the second quarter of the fiscal to Rs 1.53 lakh crore in Q3 FY2020. PSK MR
MR

RIL-Saudi Aramco deal unlikely to close by March-end, says CFO

<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

Mumbai, Shares of the state-run petroleum major <keyword id="9997688" type="COMPANY" weightage="20" keywordseo="bharat-petroleum-corp-ltd-">Bharat Petroleum Corp. Ltd.</keyword> (BPCL) fell nearly five per cent a day after the deadline for submitting bids for the strategic sale of the company ended. Investor sentiments dampened as major energy giants including <keyword id="6355199" type="COMPANY" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword>, <keyword id="152170" type="COMPANY" weightage="20" keywordseo="Saudi-Aramco">Saudi Aramco</keyword>, <keyword id="32848" type="COMPANY" weightage="20" keywordseo="BP">BP</keyword> gave the bidding process a miss and did not submit <keyword id="81620" type="COMPANY" weightage="20" keywordseo="Expressions-of-interest">Expressions of Interest</keyword> for the 52.98 per cent of the stake on sale. Shares of BPCL on the BSE plunged 4.9 per cent to touch an intra-day low of Rs 392.35 per share. At 10.54 a.m., it was at Rs 397.70, lower by 3.63 per cent from its previous close. The government on Monday said that multiple EoIs have been received for divestment of Centre's stake in the company. Sources, however, said that several global players did not pitch in for the stake sale. Total and Russia's Rosneft also did not bid for the stake sale. The lack of interest among the major players comes on the back of the poor oil demand globally amid the pandemic and low oil prices. SEE ALSO:<a href="https://www.businessinsider.in/science/health/news/moderna-says-its-coronavirus-vaccine-is-94-5-effective-against-covid-19-a-crucial-victory-in-the-fight-against-the-pandemic/articleshow/79247349.cms" data-type="tilCustomLink"> Moderna says its coronavirus vaccine is 94.5% effective against COVID-19, a crucial victory in the fight against the pandemic</a> <a href="https://www.businessinsider.in/stock-market/news/dow-soars-375-points-to-near-record-as-modernas-vaccine-update-boosts-investor-optimism/articleshow/79249468.cms" data-type="tilCustomLink">Dow soars 450 points to new record as Moderna's vaccine update boosts investor optimism</a>

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