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Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
Saudi Arabian Oil Co (Saudi Aramco), the world’s largest oil producer, will likely not pursue a plan announced last August to buy a 20 per cent stake in the oil-to-chemicals business of Reliance Industries Ltd (RIL) for $15 billion or ₹1.03-lakh crore.
Without explicitly stating that the deal was in trouble or has been called off, Reliance Industries Ltd (RIL) Chairman Mukesh Ambani, at the 43rd virtual annual general meeting, dropped enough hints at the way the potential deal would be headed. Due to unforeseen circumstances in the energy market and the Covid-19 situation, the deal has not progressed as per the original timeline, Ambani told shareholders.
“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,” Ambani said.
The two-decade long relationship refers to Aramco supplying oil to Reliance’s Jamnagar refinery “since its inception every single day for 20 years”.
At the same time, Ambanisaid, “Reliance has been approached by global companies for strategic partnerships in its petrochemical business, including in utilising these feedstocks”. He didn’t name the companies.
Plan to spin off O2C business
“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. With this, we will have an integrated and competitive oil-to-chemicals (O2C) portfolio which is valuable to global companies as it provides access to the large and growing Indian market,” he stated.
“We will approach the National Company Law Tribunal (NCLT) with our proposal to spin off our O2C business into a separate subsidiary to facilitate this partnership opportunity. We expect to complete this process by early 2021, he added.
A spokesman of Reliance, however, said that the finalisation of the deal has been “delayed” and the “global companies” Ambani was referring to were “over and above” Aramco’s interest in the O2C business.
In the last AGM on August 12, Ambani had announced that Reliance had signed a non-binding letter of intent to sell the stake to Aramco for $15 billion, pegging the enterprise value of the O2C business at $75 billion.
As part of the deal, Aramco will supply up to 700 (KBPD) or 500,000 barrels per day of crude oil on a long-term basis to Jamnagar refinery. The deal was targeted to be closed by March 31 this year after due diligence, definitive agreements, regulatory and customary approvals.
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
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