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Reliance Mukesh Ambani that it has received interest from new partners

Posted in Featured, World

Published on May 05, 2020 with No Comments

Reliance said that it has received interest from new potential global partners in taking a stake similar to the purchase by Facebook in Jio Platforms.

Reliance Industries Ltd. said Silver Lake Partners will invest about $753 million in its digital unit, days after Facebook Inc. agreed to invest in the business, boosting the efforts of Asia’s richest man to cut debt at his conglomerate.

The investment by the California-based private-equity firm is priced at a 12.5 per cent premium to Facebook’s $5.7 billion deal for a 10 per cent stake announced on April 22, Reliance said in a statement Monday. The transaction would give Jio Platforms an equity value of Rs 4.9 lakh crore ($65 billion), the Indian company said.

The Silver Lake deal is the latest in a series of fund-raising plans by Chairman Mukesh Ambani, 63, as the tycoon seeks to bolster investor confidence shaken by the coronavirus pandemic. The crash in crude oil prices caused profit at its energy-and-petrochemicals division to drop the most in nearly two decades last quarter. The collapse also added uncertainty in negotiations to sell an estimated $15 billion stake in Reliance Industries’ oil-and-chemicals division to Saudi Arabian Oil Co.

Mr Ambani promised shareholders in August that he would cut the net debt at the group, whose businesses span oil refining, retail and telecommunications, to zero from about $21 billion by March 2021. The key part of the plan was a deal with Aramco, as the Saudi oil producer is known. Last week, Reliance said in a filing that talks with Aramco are progressing and it will manage to reach its debt target ahead of schedule.

The conglomerate’s 3.667 per cent bonds due 2027 rose 0.3 cents on the dollar to 100.24 as of 5:53 p.m. in Hong Kong, the highest level since March 13, according to prices compiled by Bloomberg. The group’s 4.125 per cent notes due 2025 jumped to the highest level since March 17 to 102.78 cents.

Reliance Industries’ businesses span oil refining, retail and telecommunications1

Reliance Industries Ltd. said Silver Lake Partners will invest about $753 million in its digital unit, days after Facebook Inc. agreed to invest in the business, boosting the efforts of Asia’s richest man to cut debt at his conglomerate.

The investment by the California-based private-equity firm is priced at a 12.5 per cent premium to Facebook’s $5.7 billion deal for a 10 per cent stake announced on April 22, Reliance said in a statement Monday. The transaction would give Jio Platforms an equity value of Rs 4.9 lakh crore ($65 billion), the Indian company said.

The Silver Lake deal is the latest in a series of fund-raising plans by Chairman Mukesh Ambani, 63, as the tycoon seeks to bolster investor confidence shaken by the coronavirus pandemic. The crash in crude oil prices caused profit at its energy-and-petrochemicals division to drop the most in nearly two decades last quarter. The collapse also added uncertainty in negotiations to sell an estimated $15 billion stake in Reliance Industries’ oil-and-chemicals division to Saudi Arabian Oil Co.

Mr Ambani promised shareholders in August that he would cut the net debt at the group, whose businesses span oil refining, retail and telecommunications, to zero from about $21 billion by March 2021. The key part of the plan was a deal with Aramco, as the Saudi oil producer is known. Last week, Reliance said in a filing that talks with Aramco are progressing and it will manage to reach its debt target ahead of schedule.

The conglomerate’s 3.667 per cent bonds due 2027 rose 0.3 cents on the dollar to 100.24 as of 5:53 p.m. in Hong Kong, the highest level since March 13, according to prices compiled by Bloomberg. The group’s 4.125 per cent notes due 2025 jumped to the highest level since March 17 to 102.78 cents.

“Even in this uncertain environment globally, Reliance has managed to enter into investment agreements with large global corporates,” said Hemant Dharnidharka, chief executive officer at Dharni Wealth, a financial-advisory services firm in Mumbai. “The agreements will help the conglomerate deleverage and meet its target of being a net-debt free company before their timeline. That’s being rewarded by bondholders.”

With the Aramco talks on course, Reliance Industries said it has sought regulatory approvals to carve out the oil and chemicals division. Investors have sought clues to the progress of negotiations with Aramco, as the Saudi company is known, helping drag the stock to a two-year low in March. The shares have rebounded, gaining more than 60 per cent since the March 23 close, on renewed confidence in Mr Ambani’s ability to attract investors.

 

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