LyondellBasell development positive for RIL: Says PN Vijay

In an interview with CNBC-TV18, Portfolio Manager PN Vijay, spoke about his reading of the market and his outlook on LyondellBasell. As per PN Vijay, LyondellBasell development looks like a fairly positive development in the sense that over the last couple of years the petrochemical business of the company has been getting minor, which is a worry because they are very strong players in petrochemicals. This particular move should assuage the concerns of investors on that business. Also when the treasury stock was sold, there was quite a bit of hulla-bulla etc and the management kept saying this is a precursor for some global acquisitions. So they are keeping to their word which is mild positive. 

Reliance has been sort of doing well in the last two weeks compared to the battering it received since June. 

“They are talking about war chest of USD 6-7 billion so about 3-4 mezzanine debt taken overseas would not impair the debt equity too much. This could be a leverage buyout (LBO) also in the sense that the cash flows for the debt could be coming from the predebted company. I don’t know – I am not very sure about the cash flows. I can see your reservations, for example Corus and these types of acquisitions whether we see huge cash drain on the Indian predator. But Reliance is very smart when it comes to its funding. They get it all normally right. But it is an issue – no doubt.” Says PN Vijay.

Source: As Reported to CNBC 

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