RIL to become zero net-debt company in 18 months
- By NewsOnFloor Staff
- Aug 12, 2019
- 104 views
The statement came in the wake of rising debt at the group level that reached a level of group Rs 1,54,478 crore in the last financial year.
Addressing the group's 42nd AGM in Mumbai, Ambani said he was confident of growing the company's consolidated earnings 15 per cent annually over the next five years.
He said the group's telecom vertical Reliance Jio and retail venture Reliance Retail would account for 50 per cent of the company's earnings soon.
The RIL chairman also assured shareholders that they would continue to get periodic bonus issues and higher dividends once the group became debt-free.
Shares of the company are up 20 per cent since the last AGM in July 2018, but have underperformer Nifty by 11 per cent over the past three months.
The stock has been down 9 per cent in last one month.
The company accumulated gross debt of more than Rs 2.87 lakh crore, as it feverishly diversified into consumer-focused businesses in retail, telecom and e-commerce over the past few years besides majorly upgrading the core refining and petrochemicals businesses.
In FY19, the company's finance cost more than doubled to Rs 16,495 crore from Rs 8,052 crore in the previous year.
The group attributed the increase primarily to the commencement of digital services business, petrochemical projects at Jamnagar and higher loan balances.
Ambani told the AGM that RIL has transferred its telecom infrastructure assets into two separate infrastructure trusts for a consideration of Rs 1.25 lakh crore with the intention of raising money from large global institutional investors.
"We have received strong interest and commitments from reputed global investors and are confident that these transactions will be completed by the end of this financial year. Post this, we ended last year with net debt of Rs 1,54,478 crore," he said.
Source : ians