Mumbai: RIL is in talks with 10-15 foreign lenders to raise funds for its non-digital units. Reliance Industries plans to raise up to $ 1.5 billion (Rs. 11300 crores) in the form of overseas loans to fund capital assets, people familiar with the matter said. This follows a recent investment of Rs 61000 crore pledged in the Jio platforms unit by Facebook and others.
RIL is in talks with 10-15 foreign lenders and has begun a union process to raise funds that will be repaid within five years. The sources said the funds will be used to meet the routine capital expenditures for non-digital RIL units, including retail, petrochemical, oil and gas businesses, the source said.
"Although talks started a few weeks ago, the targeted loan sum has increased by about $ 300 million as the syndication engagement program is expanding." said one of the persons.
The loan can be priced after adding 225-250 bps to the six-month dollar-based LIBOR. However, there can be multiple price levels depending on loan installments, which are not yet being finished.
RIL did not comment on the matter. They said HSBC, Barclays, Bank of America, Credit Suisse, ANZ, Credit Agricole, MUFG, Standard Chartered, and Citigroup are some of the banks involved in raising funds.
Co Recently Raised ₹11,295 cr Domestically
Banks could not be contacted immediately.
In the third week of April, Facebook said it would acquire 9.9% of Jio Platforms for around $ 5.7 billion, worth $ 65.95 billion. Last week, US technology investor Silver Lake Partners said was buying 1.15% per unit for $ 747 million. Additionally, Vista Equity Partners, another US private equity firm is investing ₹11,367 crores in Jio Platforms.
RIL's net debt was Rs 1.61 crore as of March 31, compared to Rs 1.54 crore in the corresponding period a year earlier. The company plans to free itself from net debt by March 2021.
There will be a significant boost to the balance sheet on the back of value unlocking initiatives and the rights issue .initiatives, as RIL previously said. RIL said in an investor presentation, It has inflow visibility of Rs 1.04 lakh crore or an estimated $ 13.6 billion in this calendar year.
In addition to short-term commercial paper, the company was also borrowing money from the local debt market. In two tranches, it sold bonds with maturities of three and five years, raising Rs11,295 crore in the past three weeks.
RIL's decision to sell minority stakes in each of the three main business segments: Oil Chemicals, Jio Platforms, and Retail, will help reduce debt, rating company Crisil said in a note on May 7.
“In uncertain times, RIL appears to be more focused to reduce leverage. Anil Sharma and Aditya Bansal wrote in May that RIL surprised us and the street in terms of several announcements that significantly reduce debt and the outlook.
“RIL surprised the street with its monetization/deleveraging efforts, and the stock has strongly rebounded recently. However, we believe RIL's superior outperformance may sustain.”
RIL shares have risen 76.7% since March 23, when India’s equity markets sank to a record low. The benchmark Sensex, in comparison, has risen 21.79% since then.
Also Read: Apple may take a bigger bite of India’s manufacturing pie