Ambani will take a loan of Rs.14 thousand crores from foreign banks

HIGHLIGHTS: Reliance Industries plans to fund its telecommunications and capital expenditures of the petroleum business through an overseas syndicate loan.

Reliance Industries plans to fund its telecommunications and capital expenditures of the petroleum business through an overseas syndicate loan. For this, Reliance is trying to raise nearly two billion dollars (Rs 14,370 crore). It will be involved in efforts to raise the most funds by an Indian company in FY 2020. Last year, Reliance took a $ 1.85 billion long-term foreign loan to fund Capital Expenditure.

Fund will be raised in one or two parts

According to the Economic Times news, Reliance is in talks with about a dozen foreign banks including Barclays, Citigroup, JP Morgan, Morgan Stanley and MUFG for the loan. The company plans to begin the formal fund raising process by mid-February. The fund is expected to be raised in one or two parts. A source aware of the matter said that the primary fund raising talks have started. This funding is for regular capital expenditure and is expected to be completed before the end of this financial year.

Company is in talks with banks

Currently, the company is meeting each investment banker separately to assess the situation, but soon other banks may also join the syndication process. The term of the offshore loan is mostly five years. The price of this loan will be fixed after adding spread or markup above the rate offered by London Interbank. Although the initial price guidance for the loan has not been decided yet, it is expected that the spread will be more than 150 basis points.

Reliance has debt of 1.5 lakh crore rupees

Reliance, the country's largest company in terms of market capitalization, has announced a stake sale in its core businesses to reduce its debt. The company announced that it was in talks with Saudi Aramco to sell 20 per cent stake in its oil and petroleum business, while Canadian asset management company Brookfield invested $ 3.7 billion in Reliance's telecom tower business and gas transportation business. Has announced to invest 2 billion dollars. As of March 31, 2019, Reliance has a total debt of Rs 1.5 lakh crore. Mukesh Ambani had assured the shareholders in August 2019 that the company would be completely debt free in 18 months.

Source: Web