Riyadh - The recently announced transactions by Reliance Industries to sell stakes to Saudi Aramco and BP is expected to reduce the Indian company’s leverage, according to a report released on Wednesday by Moody’s Investors Service.
Earlier in August, Saudi Aramco and Reliance Industries Limited (RIL) signed a non-binding Letter of Intent (LoI) for the investment in the Oil to Chemicals (O2C) division including the refining, petrochemical, and fuels marketing businesses of RIL.
RIL also announced that it will sell a 49% stake in its fuel marketing business in India to BP for $1 billion.
Both transactions reduce RIL's net debt by $16 billion and lower its leverage, the report showed.
"The stake sales are in line with RIL's commitment to reduce its net debt to zero by March 2021, and reflect its commitment to maintaining a strong financial profile despite significant capital spending over the last five years," Moody's senior vice president, Vikas Halan, commented.
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