Mumbai: Mukesh Ambani-led Reliance Industries is unlikely to close the deal for 20 per cent stake in its oil to chemicals business to Saudi Aramco by March 31 this year, according to a senior company official.
In August last year, the company announced its plans to sell its 20 per cent stake in its flagship chemicals and refining business to Saudi Aramco in a deal valued at USD 15 billion (Rs 1.06 lakh crore).
The deal, is aimed at cutting its massive debt and secure an assured supply of crude oil to its refineries, was expected to be closed by March 31, 2020.
"...it will not be a deal which will get done by March 31. It's a large transaction, large cross border transaction, a complex transaction and so the timeline is something we have to be realistic about," its joint chief financial officer V Srikanth told reporters here.
He, however, said that the deal is making good progress and that there is engagement across teams.
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"If you are looking for guidelines, I am not the guy to give the timelines because we are bond by confidentiality. I can't be talking about timelines. We can only say we are progressing well," Srikanth added.
When asked if the companies would be signing the definitive agreements by March 31, he said, "we are trying to do it, but we cannot comment on timelines without engagement with them (Saudi Aramco)."
During the company's annual general meeting in last August, Ambani had said that the Saudi Aramco and BP deals, along with the plans of deleveraging of telecom arm Jio's infrastructure assets will help Reliance become "a zero-net debt company within the next 18 months, that is by March 31, 2021.
On the company's debt reduction plans, Srikanth said, "the intensity of capex has been coming off quarter on quarter. From Rs 30,000 crore of capex in the first quarter, it has reduced to Rs 19,000 crore in second to Rs 14,000 crore in the third. This is in line with what we had already said that the projects are getting completed, like the Jamnagar expansion, the Jio related capex is already done, and so this is the way it is going to be.
"So we are earning more than what we are spending so its going to translate in reduction in levels of debt. Our broader target is to be debt free by FY2021," he added.
The company's net debt levels have reduced from Rs 1.57 lakh crore in the second quarter of the fiscal to Rs 1.53 lakh crore in Q3 FY2020.
