Reliance Industries (RIL) will be a net zero-debt company within the next 18 months, Chairman Mukesh Ambani said at the company’s 42nd Annual General Meeting in Mumbai on August 12.
At the AGM, Ambani said that RIL had entered into a long-term partnership with Saudi Arabia’s national petroleum company Saudi Aramco. Under the deal, Aramco would buy a 20 percent stake in RIL’s oil-to-chemicals division at an enterprise value of $75 billion.
He said the deal with Aramaco, as well as the retail petroleum deal with BP will be closed within this financial year. That would bring in Rs 1.15 lakh crore into the company.
These, along with other transactions to deleverage the group, would make the company a zero-net debt company in 18 months.
“We have a very clear road map to becoming a net zero debt company within the next 18 months, that is March 31, 2021,” he said.
As on FY19-end, RIL had a net debt of Rs 1.54 lakh crore. The net zero debt milestone will be achieved through some of the major deals that has already been announced as well as some of the deals in the pipeline.
RIL has invested nearly Rs 5.4 lakh crore over the last five years to generate EBITDA in excess of $1 billion annually for over a decade.
In addition, Ambani said the company has received strong interest from strategic and financial investors in its consumer businesses Jio and Reliance Retail. He said the group was working on a plan to list both these businesses within the next five years.
Also, there are plans on monetising the group’s real estate assets as well financial investments.
Already, RIL has shifted around Rs 1.25 lakh crore worth of telecom assets into a separate infrastructure trust with the intention of raising money from global institutional investors. Ambani said the group has received “strong interest and commitments” from global investors.
He told shareholders that once the net zero debt status was achieved, they would be amply rewarded in the form of dividends and bonus share issues. "As we achieve our zero-net debt target this financial year, 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," he said.
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