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Stack sale and reducing debt

Discussion in 'Fundamental Analysis' started by brijesh_chokshi, Apr 19, 2019.

  1. brijesh_chokshi

    brijesh_chokshi Member

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    As per recent news Reliance is selling 25% ownership/stack to saudi aramco to reduce debt. How stock sale will reduce debt? Or they will infuse 25% more stocks and collect money and pay debt as in the case of IPO which collect money from public.

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    brijesh_chokshi, Apr 19, 2019
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  2. shabbir

    shabbir Administrator Staff Member

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    The asset is owned by the company. So whatever they sell, the cash will in the company. This will be paid top the debtors to reduce the debt.
     
    shabbir, Apr 20, 2019
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  3. brijesh_chokshi

    brijesh_chokshi Member

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    So there is no any share/stock exchange/sale/transfer but transactiin of company assets. And buyer will be take asset and transaction complete. Buyer will then no other rights on RIL (decission, profit, dividend) etc.Am i correct?

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    brijesh_chokshi, Apr 20, 2019
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  4. nirajshah

    nirajshah Champion

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    nirajshah, Apr 20, 2019
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  5. shabbir

    shabbir Administrator Staff Member

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    The asset are owned by the company and they will acquire part of it only. So they may be share holders in Reliance or it could be they are share holder of the subsidiary as well. Aren't sure about the complete contour of the deals but a general view of how it may be done.
     
    shabbir, Apr 21, 2019
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