Reliance Industries: RIL plans to sell bonds up to $ 3 billion in one go
The proceeds would be used to refinance existing loans and obligations contracted with international investors earlier. While international bonds issued 8-10 years ago mature early this year, a set of loans mature in the next three or four months.
This decision, neutral in terms of debt, will help the company to save up to 50 basis points on financing costs or to lengthen maturities.
The bonds are likely to have maturities of 10 years and 30 years. The company is seeking an enabling resolution from the board of directors, which will meet on Saturday.
“The focus would be on tight pricing because the business is on a solid footing. The final size depends on that, ”said one of the people named above.
If the company gets an encouraging response from investors, it could total more than $ 3 billion at one time, which in turn would be Asia’s biggest contract, sources said.
“The company is in close discussions with investment bankers as they structure the deal and schedule road shows,” said a senior executive.
While pricing is yet to be set, calculations on the back of the envelope suggest the 10-year paper may be offered initially after adding around 110-130 basis points to the benchmark US Treasury index. .
Likewise, the company may offer the 30-year series with similar maturity from the US Treasury plus 130-140 basis points.
did not immediately respond to ET’s request.
“This is to inform that a meeting of the Finance Committee of the Board of Directors of Reliance Industries Limited is proposed on January 1, 2022, to consider an issue of senior unsecured fixed rate notes denominated in US dollars”, the company said. in a stock market notification last Wednesday. He didn’t mention any other details about the quantum, pricing, and timing.
Investors all over the world, including the United States, can invest in these bonds, called 144A in market jargon. The bonds will be of investment grade quality.
“The company has a strong balance sheet after fundraising, while its traditional business will continue to generate stable cash flow,” ICICI Securities said in a report about a month ago.
“RIL’s long-term outlook and dominance in each of its product and service portfolios provide comfort for long-term value creation,” he said.
The retail petroleum conglomerate has increasingly focused on expanding unconventional businesses.
Reliance New Energy Solar has just received a green signal from the Indian Competition Commission to acquire a 40% stake in Sterling and Wilson Solar.
Reliance New Energy Solar (RNESL), a 100% subsidiary of the company, has reached an agreement with Faradion and its shareholders to acquire 100% of the shares of Faradion through secondary transactions for a total value of 94, £ 42million based on an enterprise value of £ 100million, the company said on Friday.
The company plans to use around 3 gigawatts (GW) of solar power to generate 400,000 tonnes of hydrogen in its Gigafactory electrolyzer.