'RIL-Aramco stake sale talks stall over valuation, deal structure'

Chemical Weekly: Reliance Industries Ltd.’s talks to sell a minority stake in its refinery business to Saudi oil giant Aramco have hit a roadblock over valuation and deal structure, according to a Reuters report.

The talks concern Saudi Aramco interest in picking up to 25% stake in a proposed special purpose vehicle (SPV) housing the twin refine-ries of RIL as well as the firm’s petro-chemical complex. The Saudi firm is said to have disagreed with RIL over the transfer of some of the Rs. 2,88,243-crore group debt to the SPV.

However, a later report from Reuters quoted Saudi Arabia’s Energy Minister Khalid al-Falih as saying that Saudi Aramco’s talks with RIL have not stalled. “The two companies, Reliance and Aramco, are talking with a lot of goodwill, with good intention,” he told Reuters in an interview. He was ‘optimistic’ that a deal between the two companies would work out.

Reliance operates the world’s biggest refining complex with capacity to process 1.4 million barrels per day (bpd) of oil at Jamnagar. Aramco, the world’s biggest oil producer, plans to boost investment in refining and petro-chemicals to secure new markets for its crude amid a recent demand slowdown.

RIL has been selling assets – from mobile-phone towers to energy assets – to pare debt. The company’s plans to sell 25% of its refinery and petro-chemicals business could fetch at least $10-bn,Bloomberg News had reported in April. The sale would help pare the conglomerate’s obligations that have risen to about $42-bn, as it poured money into new sectors such as telecommunications.