Ambani is going on a cash hunt in lockdown | Economic Times

Mumbai: Reliance Industries plans to raise as much as $1.5 billion (Rs 11,300 crore) in overseas loans to fund capital assets, said people with knowledge of the matter. This follows the recent Rs 61,000 crore of investment pledged in the conglomerate’s Jio Platforms unit by Facebook and others.RIL is in talks with 10-15 foreign lenders and the syndication process to raise funds that will be repayable in five years has begun, said the persons. The funds will be used for routine capital expenditure needs of RIL’s non-digital units, including the retail, petrochemicals and oil & gas businesses, the sources said.“Although talks began some weeks ago, the targeted loan sum has increased by about $300 million as the syndication programme is expanding,” said one of the persons.The loan may be priced after adding 225-250 basis points to the six-month dollar-based LIBOR. However, there could be multiple pricing levels depending on loan installments, which have not yet been finalised, said the people cited earlier.RIL didn’t comment on the matter. HSBC, Barclays, Bank of America, Credit Suisse, ANZ, Credit Agricole, MUFG, Standard Chartered and Citigroup are some of the banks involved in the fundraising, they said. 75666422Co Recently Raised Rs 11,295 cr DomesticallyThe banks could not be contacted immediately.The fundraising comes at a time when the oil-to-retail conglomerate is set to launch a $7-billion rights offer, the largest in the country.In the third week of April, Facebook said it would acquire 9.9% in Jio Platforms for about $5.7 billion, valuing it at $65.95 billion. Last week, US technology investor Silver Lake Partners said it was buying 1.15% in the unit for $747 million. In addition, Vista Equity Partners, another US private equity firm, is investing Rs 11,367 crore in Jio Platforms.RIL’s net debt was Rs 1.61 lakh crore as on March 31, compared with Rs 1.54 lakh crore in the corresponding period a year earlier. The company aims to become net debt free by March 2021.There will be significant strengthening of the balance sheet on the back of value unlocking initiatives and the rights issue, RIL had said earlier. It has inflow visibility of Rs 1.04 lakh crore, or an estimated $13.6 billion, in this calendar year, RIL said in an investor presentation.Besides short-term commercial papers, the company has been borrowing money from the domestic debt market as well. In two tranches, it sold bonds of three- and five-year maturities, raising Rs 11,295 crore in the past three weeks.RIL’s decision to sell minority stakes in each of its three major business segments — oil to chemicals, Jio Platforms and retail — will help reduce debt, drive growth and improve financial flexibility, rating company Crisil said in a note on May 7.“In uncertain times, RIL seems more focused to reduce leverage. RIL has surprised us and the Street in terms of several announcements that reduce debt considerably and improve the outlook,” Nomura analysts Anil Sharma and Aditya Bansal wrote on May 4. “RIL has surprised the Street with its monetisation/deleveraging efforts, and the stock has strongly rebounded recently. Yet, we think that RIL’s outperformance may sustain.”RIL shares have risen 76.7% since March 23, when India’s equity markets sank to a record. The benchmark Sensex, in comparison, has risen 21.79% since then.