Saudi Aramco Reliance Deal: Mukesh Ambani, chairman of Reliance Industries, warned shareholders at the company’s 44th annual general meeting on Thursday that the country is facing a humanitarian catastrophe due to the coronavirus epidemic.
“Despite the Covid epidemic, our business and financial success has surpassed expectations since the last AGM. But it is RIL’s humanitarian activities during these really tough times that have brought me considerably more joy than our financial performance “Mukesh Ambani stated.
RIL’s performance remained exceptional even in a difficult climate. According to Ambani, consolidated sales was Rs 5.4 trillion, consolidated EBITDA was Rs 98,000 crore, and consumer companies provided over half of EBITDA.
In FY21, RIL’s contribution to the Indian economy was unrivalled: 6.8% of India’s merchandise exports, 75,000 new employment, Rs 21,044 crore in customs and excise, Rs 85,306 crore in GST and VAT, and Rs 3,213 crore in income tax, he added.
RIL raised $44.4 billion, the biggest capital raising by any firm in the world in a single year. “This capital raising demonstrates global investors’ trust in India’s economic potential,” Ambani remarked.
Yasir Al-Rumayyan, Chairman of Saudi Aramco and Governor of PIF, will join the Reliance Industries Board of Directors as an Independent Director, according to Ambani. “His appointment to our Board marks the start of Reliance’s internationalisation,” he added.
Reliance chairman Mukesh Ambani has announced plans to invest Rs 75,000 crore over the next three years in green energy projects.
Al-Rumayyan, 51, a Harvard graduate, will succeed Yogendra P Trivedi, 92, who has indicated a wish to retire, according to Ambani at the company’s annual shareholder meeting.
He predicted that the sale of a 20% share in the O2C firm will be completed this year.
“Even throughout this epidemic, both parties have maintained their commitment and resolve, demonstrating a solid partnership between Saudi Aramco and Reliance. This year, I expect our collaboration to be formalised as soon as possible “Mukesh Ambani also offered his two cents.
“At the start of the year, our B2C company was confronted with unprecedented hurdles as a result of the terrible economic downturn. Despite this, we were arguably the only firm in the world that was profitable every quarter while operating at near full capacity “Ambani said.
He further stated that the company rewarded its shareholders with the largest and most successful Rights Issue ever undertaken by an Indian firm. “Our retail shareholders have received 4x returns on their rights shares in only one year,” Ambani remarked.
The firm, according to Ambani, wants to overcome the green energy divide in India and throughout the world.
“India, as one of the world’s largest energy markets, will play a key role in changing the global energy environment. We’ve formed the Reliance New Energy Council, which includes some of the world’s brightest thinkers. On 5,000 acres in Jamnagar, we’ve begun construction on the Dhirubhai Ambani Green Energy Giga Complex. It will be one of the world’s largest integrated renewable energy manufacturing plants. We intend to construct four Giga Factories to produce and integrate all essential components of the New Energy ecosystem, including solar photovoltaic modules, energy storage batteries, electrolysers, and fuel cells “Ambani stated.
“We would invest over Rs 60,000 crore in these projects over the next three years. We would spend an extra Rs 15,000 crore in upstream and downstream sectors, as well as value chain, collaborations, and future technologies. As a result, our total investment in the New Energy industry would be Rs 75,000 crore over the next three years “In terms of the company’s future ambitions, he stated.
Reliance Industries appoints new board of directors.
Al-appointment Rumayyan’s will reduce the average age of Reliance’s board of directors, in addition to adding his extensive financial knowledge. He currently serves on the boards of SoftBank Group Corp and Uber Technologies.
Jio Platforms contains the company’s digital and telecom section, retail is a distinct entity, while oil refining and petrochemical divisions have been created off of the O2C sector to seek strategic alliances in recent years.
PIF has spent billions of dollars in RIL enterprises under Al-leadership. Rumayyan’s
PIF paid Rs 11,367 crore for a 2.32 percent interest in RIL’s digital business Jio Platforms in June last year. It bought a 2.04% interest in RIL’s retail operation for Rs 9,555 crore five months later. PIF has also invested Rs 3,779 crore in Digital Fibre Infrastructure Trust (DFIT), an infrastructure investment trust (InvIT) that houses RIL’s fiber-optic assets.
“I am certain that his vast expertise operating one of the world’s greatest corporations, as well as one of the world’s largest sovereign wealth funds, will be invaluable to us,” he added. “His appointment to our board marks the start of Reliance’s internationalisation. In the coming months, you’ll learn more about our worldwide aspirations.”
Al-Rumayyan, an accounting graduate of King Faisal University in Saudi Arabia who went on to Harvard Business School for a general management degree, has been the Governor of the Public Investment Fund (PIF) since May 2019. In September 2019, he was named chairman of Saudi Aramco’s board of directors.
Al-Rumayyan has worked at some of Saudi Arabia’s most important financial institutions for over 25 years.
He began his career at the Saudi Hollandi Bank, where he worked in different departments and held significant positions. He is a member of the Council of Economic and Development Affairs, as well as an advisor to the Council of Ministers’ General Secretariat, Chairman of the Decision Support Center, and a member of the Saudi Industrial Development Fund’s board of directors.
Ambani said in August 2019 that he and the world’s largest oil exporter were in discussions to sell a 20% interest in their oil-to-chemicals (O2C) company, which includes their twin oil refineries in Gujarat and petrochemical assets.
The agreement was supposed to be completed by March 2020, however it has been postponed.
The two are allegedly contemplating a cash and share transaction, with Aramco initially paying for the holding with its shares and subsequently staggered cash payments over a number of years.
The O2C company has a 51 percent interest in the petroleum retailing industry, in addition to refineries and petrochemical facilities. It does not, however, include upstream oil and gas producing assets such as the KG-D6 block in the Bay of Bengal, which is sagging.
After signing a non-binding letter of intent with Saudi Aramco in 2019, RIL valued the O2C business at $75 billion.
Reliance would be able to develop financial power by purchasing 20% of Aramco’s O2C business.
The company has previously announced the creation of a separate subsidiary for the O2C business in order to facilitate strategic alliances and new investors and expedite its new energy and material ambitions.
Jio Platforms, a subsidiary, already handles the digital sector, while Reliance Shopping handles both offline and online retail.
Reliance would be able to develop financial power by purchasing 20% of Aramco’s O2C business, allowing it to carve out a niche in the highly competitive omnichannel retail market.
Aramco would own a piece of one of the world’s top refineries and the world’s biggest integrated petrochemical complex if it took a stake. It offers access to one of the fastest-growing markets, with a ready market for 5 lakh barrels per day of Arabian crude and the possibility for a larger downstream role in the future.
The RIL board also includes Ambani’s wife, Nita, and cousins Hital and Nikhil Meswani. PMS Prasad and PK Kapil, both business leaders, are also on the board.