As reported by Bloomberg’s Pratish Narayanan:
Reliance Industries Ltd. (RIL), India’s largest company by market value, is in talks with banks to arrange as much as $1.5 billion in dollar-denominated loans, according to two people familiar with the matter.
Reliance, controlled by billionaire Mukesh Ambani, plans to borrow $1.1 billion in five-year loans to replace debt maturing in about two years that has higher interest costs, the people said, not wishing to be identified because the terms aren’t set. The company may obtain another $400 million of new loans, the people said.
Reliance, India’s fourth-most indebted company, is looking to borrow at about 165 basis points more than the six-month London interbank offered rate, or Libor, the people said. The company has not appointed the lead arrangers and banks wanting to participate in the debt syndicate need to apply by May end, the people said.
Manoj Warrier, a Mumbai-based spokesman for Reliance, declined to comment. The company’s shares rose 0.8 percent to 923.2 rupees in Mumbai yesterday. They have declined 12 percent this year.
“The company has a lot of projects lined up, such as a petrochemicals plant at Jamnagar and the money could be used for that,” said Jagdish Meghnani, a Mumbai-based oil and gas analyst at Alchemy Share & Stock Brokers.
Ambani, 54, is the world’s ninth-richest man with an estimated wealth of $27 billion, according to Forbes magazine. Reliance has $14.2 billion of debt outstanding maturing through 2097, according to data compiled by Bloomberg.
Mumbai-based Reliance sold $1 billion of 10-year 4.5 percent dollar-denominated notes and $500 million of 30-year 6.25 percent bonds in October, Bloomberg data show.