InvestorQ : How will the Facebook deal, help RIL to reduce its group debt?
Arya Nanda made post

How will the Facebook deal, help RIL to reduce its group debt?

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Deepa Salunkhe answered.
6 months ago
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When the Aramco deal was signed, the intent was to leverage the deal part of the debt. However, the deal ran into trouble and then the oil price crash happened. Now that deal looks unlikely at the existing terms and conditions. That is why the FB deal becomes critical to manage debt better. Over the last five years, the total debt of Reliance group has gone up 2-fold and interest cost is up 5-fold. The aim of the group is to reduce its net debt (at Rs.1.5 trillion) down to zero in the next two years. With the Aramco deal looking very unlikely in the current oil market conditions, this allows RIL to start its debt reduction process. Out of the Rs.46,000 crore, RIL expects to use at least Rs.28,000 crore to reduce its debt. Clearly, that will do a world of good for RIL’s long term valuations. Monetizing assets fits in perfectly for Reliance. At least, RIL will start the process of reducing its debt which will reduces its financial risk substantially.

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