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Reliance Industries to sell its stake in Asian Paints

May 13/2020

MOSCOW (MRC) -- Reliance Industries Ltd. is considering selling its stake in Indias largest paint maker valued at about USD989 million as the conglomerate steps up efforts to trim its debt, reported Kemicalinfo with reference to Bloomberg's report.

RIL is in discussions with banks for a potential sale of its 4.9% stake in Asian Paints Ltd. through a series of block trades, according to the report. Reliance holds the stake through Teesta Retail.
The size and timing of any potential sale havent been finalized, and Reliance could decide not to pro-ceed with a deal, the people said," the report added.

The sale of stake in Asian Paints is part of RILs string of fundraising plans unveiled in order to bolster investor confidence, even as the crash in oil prices pulled down profit at the companys oil-to-chemicals business.
Last month, Reliance said that the groups net debt would be slashed to zero ahead of its previous target of early 2021.

Asian Paints is Indias largest paints & coatings manufaturer by revenue. The company operates in 15 countries with 26 paint manufacturing facilities globally.

On report of RIL stake sale, the stock of Asian Paints has underperformed the market by falling 15%, as compared to a 0.55% rise in the S&P BSE Sensex.

As MRC informed before, in November 2019, Reliance Industries confirmed plans to invest 700 billion Indian rupees (USD9.75 billion) to establish a crude-oil-to-chemicals (COTC) complex at the company's Jamnagar, India.

The MCC/HSFCC complex will have combined capacity for 8.5 million metric tons/year (MMt/y) of ethylene and propylene, and total extraction capacity for 3.5 MMt/y of benzene, toluene, and xylenes. It will also have combined capacity for 4.0 MMt/y of para-xylene (p-xylene) and ortho-xylene. The steam cracker will have combined capacity for 4.1 MMt/y of ethylene and propylene, and feed crude C4s to a 700,000-metric tons/year butadiene extraction plant. Reliance will also add 1.3 MMt/y of p-xylene capacity at existing plants at Jamnagar.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, adhesives, paints and coatings, Reliance Industries, India, Russia.
Category:General News
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