The latest loan plan follows Reliance Industries’ record borrowing in foreign currency last year. (Photo: Bloomberg)
By Saikat Das
A unit of India’s largest company Reliance Industries Ltd. is planning to borrow at least $500 million to refinance debt, in what could be the conglomerate’s first offshore loan this year.
It is in talks with a group of foreign banks for a loan of 12-15 years, people familiar with the matter said, asking not to be identified as the discussions are private. The funds would be raised for Ethane Crystal LLC, a subsidiary of Reliance Ethane Holding Pte., the group’s business of buying ships to transport ethane, they said.
In 2016, Reliance Ethane had raised a loan of $572 million with a 12-year tenor to purchase six new ethane carriers. A longer repayment period will potentially help billionaire Mukesh Ambani’s conglomerate to improve its cost competitiveness. Ethane business is one of the factors that contributed to its profitability in the March quarter.
The proposed fundraising comes as India’s ethane demand hit a record high earlier this year. The country is seeking to boost its petrochemical capacity to keep pace with growing consumption of plastics. Reliance Industries operates one of the largest ethane transportation and cracker facility, which enables procurement of the gas from North America to its plant in Dahej, Gujarat.
A company spokesperson didn’t respond to requests seeking comments on Thursday.
In March, Reliance Ethane invested $102.9 million into three new subsidiaries which would use the funds to make part payments for contracting three new ships. The latest loan plan follows Reliance Industries’ record borrowing in foreign currency last year.
First Published: Jul 11 2024 | 2:34 PM IST
