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How Mukesh Ambani plans to turn Reliance into zero net debt company

Business Today logo Business Today 12-08-2019
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Mukesh Ambani on Monday said Reliance Industries was eying to become a "zero net debt company" in the next 18 months. Ambani said Reliance Industries Limited (RIL) had overall debt of Rs 1.54 lakh crore up till March 2019.

And to make it a zero debt company, RIL will raise money through stake sale in its oil and petrochemical business, inviting investors in Reliance Retail and Jio, and value unlocking in real estate and financial investments. The company hopes to achieve the target by March 31, 2021.

"Last year, we transferred our telecom infrastructure assets to two separate infrastructure trusts for a consideration of Rs 1.25 lakh crore with the intention of raising this money from large global institutional investors. We have received strong interest and commitments from reputed global investors and are confident that these transactions will be completed by the end of this Financial Year," he added.

He said Reliance Industries was expecting to complete transactions with Saudi oil giant Aramco and BP within this financial year, which could generate an inflow of Rs 1.15-lakh crore. Aramco would buy 20 per cent stake in the company's oil refinery and chemical business at an enterprise value of $75 billion (around Rs 5.32-lakh crore).

Mukesh Ambani-led RIL has also signed an agreement with British energy giant BP plc to form a new joint venture that will include a retail service station network and aviation fuels business across India. The JV will assume ownership of RIL's existing Indian fuel retail network of over 1,400 sites across India, which the partners aim to expand fourfold to 5,500 sites over the next five years.

In Pics: Things you didn't know​ about Mukesh Ambani

Mukesh Ambani said RIL would move towards the listing of both Reliance Jio and Reliance Retail in the next five years during which several global partners will be inducted to boost these businesses. The RIL Chairman assured the company's shareholders that once the company achieves the "zero net-debt target", all of them would be "rewarded abundantly".

"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," said Ambani. During the 42nd shareholders' meet, Mukesh Ambani launched much-awaited Jio GigaFiber service, under which the company will offer over 100 Mbps data speed at tariff starting at Rs 700.

Also watch: Jio subscriber base touches 340 million

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(Video provided by The Times of India)

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