Talks about selling a 20 per cent stake in Reliance Industries Ltd’s (RIL) oil-to-chemical business to Saudi Aramco have stalled over the valuation, as the energy market has been hit by the COVID-19 pandemic, news agency Reuters reported on Thursday, quoting four sources familiar with the matter. Aramco wants Reliance to review its price for the oil-to-chemical business as the global valuation of oil assets has tumbled due to falling demand for crude, one source said, according to the Reuters report.
Meanwhile, a second source said Aramco wanted to “revisit” the valuation, according to Reuters.
On Wednesday, while addressing the shareholders at RIL’s 43rd annual general meeting (AGM), the company’s Chairman and Managing Director (CMD) Mukesh Ambani had said that that the Aramco deal has not progressed according to the scheduled timeline due to ongoing pandemic situation.
“Deal with Saudi Aramco hasn’t progressed per original timeline due to unforeseen situation in the energy market and COVID-19 situation. We value our two-decade relationship with Aramco and are committed to long term partnership,” Mr Ambani said.
The Reliance stock reacted negatively to the announcement, witnessing a sharp 5 per cent decline soon after, in Wednesday’s intra-day trading. On Thursday too, the Reliance stock was in the red with the shares down nearly half a per cent as the markets neared the closing bell.