Reliance Industries to raise $2 billion funding for Jio, petroleum business

Reliance Industries (RIL) has announced its largest fund raising efforts in fiscal 2020. The company is planning to raise as much as $2 billion (₹14,370 crore) via overseas syndicated loans to fund routine capital expenditure in telecommunications and petroleum businesses.

According to the sources, RIL is in talks with at least a dozen banks including Barclays, Citigroup, JP Morgan, Morgan Stanley and MUFG and plans to launch the formal process to raise funds by mid-February. The money could be raised in one or two tranches.

Sources say the company is holding individual meetings with each investment banker to assess the situation, with more banks likely to join the syndication process. The offshore loan is expected to be of five-year tenure. It would be priced after adding a spread, or markup, over the London InterBank Offered Rate (LIBOR).

The initial price guidance is not yet fixed. The spread is likely to be more than 150 basis points. The company also raised $1.85 billion of long-term foreign loans to fund capital expenditures in June 2019.

Reliance had a total debt of Rs 1.5 lakh crore as on March 31, 2019. Chairman Mukesh Ambani has assured shareholders in August 2019 that the company would be a zero net-debt firm in 18 months. The company had announced that it is in talks with Saudi Aramco to sell a 20% stake in its oil and petroleum business while Canadian asset manager Brookfield said it would invest $3.7 billion in its telecom tower business and another $2 billion in gas transportation.