RIL hires SBI, other banks to raise $1.1 billion debt
17 June 2011
Mukesh Ambani-led Reliance Industries has reportedly hired several banking majors, including SBI, Bank of America and Citigroup, to raise debt of about $1.1 billion (about Rs5,000 crore).
The five-year term loans would go towards refinance of its existing higher interest rate debts, according to sources.
The banks hired for raising the loans include SBI, Stanchart, Bank of America, RBS, HSBC, ANZ Bank, Bank of Nova Scotia, Bank of Tokyo Mitsubishi UFJ, Barclays, BNP Paribas, Citigroup, DBS and Sumitomo Mitsui.
Speaking at the company's AGM, earlier this month, chairman and MD Mukesh Ambani said RIL would become debt-free on net basis in the current financial year ending March 2012. RIL had an outstanding debt of Rs67,397 crore ($15.1 billion) as of 31 March 2011 against Rs62,495 crore ($13.9 billion) a year ago.
RIL also had cash and cash-equivalents of Rs42,393 crore ($9.5 billion) as on 31 March this year, which was nearly double the level from year ago.
The company initiated a process last month for fresh loans worth about $1.5 billion from which, loans worth about $1.1 billion would go towards repayment of loans maturing over the next two years, while it would go for further $400-500 million of fresh borrowings from abroad.
In October last year, RIL had raised $1.5 billion for the first time through bonds denominated in US dollars.
It raised $1billion through 10-year bonds, while another $500 million were arranged through sale of 30-year bonds.
The bond sale, which was coordinated through RIL's wholly-owned subsidiary Reliance Holding USA Inc, was the company's first such bond issue after 13 years.
Further, it came as the largest-ever public market offshore bond offer from RIL and was also the largest ever corporate bond from India. Several Indian companies later took same route to raise funds for their operations, which included companies like Anil Ambani group firm Reliance Communications, ICICI Bank, Axis Bank, Essar Energy, JSW Steel and IDBI Bank.