Saudi Aramco said it will continue to look for investment opportunities in India after Reliance Industries Ltd. scrapped a plan to sell a stake in its oil-to-chemicals unit to the Middle Eastern company…reports Asian Lite News
“India offers tremendous growth opportunities over the long term,” Aramco said in a statement on Sunday. It will “continue to evaluate new and existing business opportunities with our potential partners.”
Aramco had signed a non-binding letter of intent in August 2019 for a potential 20% stake in Reliance’s oil-to-chemicals unit valued at about $15 billion. Reliance said the companies would walk away from the deal on Friday.
“Reliance and Aramco have a longstanding relationship and will continue to look for investment opportunities in India,” Aramco said.
Reliance, in its statement, also said it will continue to be Aramco’s preferred partner in India and “is committed” to a pact with the firm, without specifying further.
As recently as June this year, Reliance said it expected to finalize the investment deal with Aramco and appointed the latter’s chairman, Yasir Al-Rumayyan an independent director on its board.
That revived hopes of the deal coming through after Mukesh Ambani, Asia’s richest person, said in 2020 that the pandemic and its impact on fuel demand had created hurdles for the transaction.
Reliance Industries’ investors dump shares
Meanwhile, shares of Reliance Industries Ltd on Monday tumbled over 4 per cent after it shelved a proposed deal to sell a 20 per cent stake in its oil refinery and petrochemical business to Saudi Aramco for $15 billion.
The market heavyweight stock tanked 4.22 per cent to Rs 2,368.20 on the BSE. At the NSE, it tumbled 4.17 per cent to Rs 2,370.
After missing two self-imposed deadlines, billionaire Mukesh Ambani’s Reliance Industries Ltd has shelved a proposed deal to sell a 20 per cent stake in its oil refinery and petrochemical business to Saudi Aramco for an asking of $15 billion, as the Indian firm focuses on the new energy business.
“Due to evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context,” the Indian firm said late Friday, adding that it will continue to be Saudi Aramco’s “preferred partner” for investments in India’s private sector.
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Ambani had in company’s annual general meeting of shareholders in August 2019 announced talks to sell a 20 per cent in the oil-to-chemicals (O2C) business, which comprises its twin oil refineries at Jamnagar in Gujarat, petrochemical assets and 51 per cent stake in fuel retailing joint venture with BP, to the world’s largest oil exporter.
At that time, he had announced the deal would close by March 2020. The deadline was missed and the company blamed pandemic controlling restrictions, imposed towards the end of March 2020, for hampering due diligence.