The Hindu Business Line

‘Re­liance In­dus­tries has clear roadmap to be zero net-debt com­pany by March 2021’

List­ing of RJio, re­tail busi­ness on the cards, says Mukesh Am­bani

- RA­JESH KU­RUP P MANOJ Business · Investing · Reliance Industries Limited · Saudi Aramco · Austria · British Petroleum · United Kingdom · Jio · Mukesh Ambani · Reliance Industries · Saudi Aramco (United States) · Reliance Retail

Mukesh Am­bani, Chair­man of Re­liance In­dus­tries Ltd (RIL), on Mon­day said that the com­pany could be­come debt-free over the next 18 months.

“We have a very clear roadmap to be­com­ing a zero net-debt com­pany within the next 18 months, that is by March 31, 2021,” Am­bani said.

Re­liance In­dus­tries Ltd (RIL) will sell a 20 per cent stake in its oil-to-chem­i­cals busi­ness to Saudi Aramco at an en­ter­prise value of $75 bil­lion, mak­ing it one of the big­gest for­eign di­rect in­vest­ment (FDI) deals in the coun­try.

Last week, RIL had an­nounced a deal with BP wherein the UK-based com­pany will ac­quire 49 per cent stake in RIL’s re­tail dis­tri­bu­tion busi­ness.

‘Win-win’ re­la­tion­ships

“Our trans­ac­tions with Saudi Aramco and BP will cre­ate ‘win-win’ re­la­tion­ships, gen­er­at­ing sig­nif­i­cant strate­gic value for our part­ners. We ex­pect to com­plete th­ese trans­ac­tions within this fi­nan­cial year, sub­ject to de­fin­i­tive agree­ments, due dili­gence, reg­u­la­tory and other cus­tom­ary ap­provals. The com­mit­ments from th­ese two trans­ac­tions are about ₹1.1 lakh crore,” Am­bani said. RIL had ended last year with net debt of ₹ 1.54 lakh crore.

Com­ment­ing on the devel­op­ment, Ajay Bodke, CEO, PMS Prab­hu­das Lil­lad­her, said, “This pro­gramme to ag­gres­sively pur­sue delever­ag­ing in busi­nesses such as OTC, fi­bre and tower, and emerge as a zero net-debt com­pany in the next 18 months, will strengthen the con­sol­i­dated bal­ance sheet, lead­ing to strong val­u­a­tion re-rat­ing of the stock. RIL con­tin­ues to re­main as the pre-em­i­nent play on the In­dian eco­nomic jug­ger­naut, that is likely to touch $10 tril­lion by 2030.”

RIL is also look­ing to unlock value in other busi­nesses. “We have re­ceived strong in­ter­est from strate­gic and fi­nan­cial in­vestors in our con­sumer busi­nesses — Jio and Re­liance Re­tail. We will in­duct lead­ing global part­ners in th­ese busi­nesses in the next few quar­ters, and move to­wards list­ing of both th­ese com­pa­nies within the next five years,” Am­bani said.

‘New com­merce’ bet

Stat­ing that Re­liance Re­tail has taken pole po­si­tion in the $80-bil­lion or­gan­ised re­tail mar­ket in the coun­try, Am­bani said the com­pany has built ca­pa­bil­i­ties to ad­dress the $700-bil­lion un­or­gan­ised re­tail op­por­tu­nity, which RIL terms as “new com­merce”.

“We will also eval­u­ate value un­lock­ing op­tions for our real es­tate and fi­nan­cial in­vest­ments,” he added.

“With th­ese ini­tia­tives, I have no doubt that your com­pany 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,”Am­bani said.

Am­bani also said that RIL has re­ceived Letter of In­tent from the gov­ern­ment to set up Jio In­sti­tute un­der the In­sti­tute of Emi­nence frame­work. This will be the coun­try’s largest re­search univer­sity, he added.

 ?? MUKESH AM­BANI Chair­man of Re­liance In­dus­tries Ltd YZ ?? “Our trans­ac­tions with Saudi Aramco and BP will cre­ate ‘win-win’ re­la­tion­ships, gen­er­at­ing sig­nif­i­cant strate­gic value for our part­ners.”
MUKESH AM­BANI Chair­man of Re­liance In­dus­tries Ltd YZ “Our trans­ac­tions with Saudi Aramco and BP will cre­ate ‘win-win’ re­la­tion­ships, gen­er­at­ing sig­nif­i­cant strate­gic value for our part­ners.”

Newspapers in English

Newspapers from India