Reliance Industries Ltd., operator of the world’s biggest refining complex, plans two U.S. dollar-denominated offshore loans of about $500 million each, backed by export credit agency guarantees, according to a person familiar with the matter.
HSBC Holdings Plc has been approached to arrange both facilities, the person said, asking not to be identified because the details are private. The first, of $400 million to $500 million, will have a guarantee from Korea Trade Insurance Corp., or K-sure, and will mature in about six years, the person said. The second, also of about $500 million, will be backed by French export credit agency Coface SA and have a tenor of about 13.5-years, the person said.
“We are in discussions with several export agencies at all times for financing of our new capex projects,” a Reliance Industries spokesman, who asked not to be identified in line with company policy, said today by e-mail. “But we cannot share any specific details.”
Reliance Industries, India’s biggest company by market value, is accelerating investments to boost output of natural gas and petrochemicals as it bets local demand will double by as early as 2017, Chief Financial Officer Alok Agarwal said last week. The company has signed about $4.3 billion of foreign-currency denominated loans this year, the most by any local borrower, according to data compiled by Bloomberg.
Reliance’s shares were trading 0.8 percent lower at 827.75 rupees as of 12:25 p.m. in Mumbai. The stock is up 19 percent year-to-date, versus a 26 percent increase in the BSE India Sensitive Index.
HSBC is awaiting final approvals from K-sure and then plans to arrange a club deal with other lenders to provide the debt, the person said. The facility will pay a margin around the high 100 basis point area to low 200 basis point area more than the London interbank offered rate, the person said.
Proceeds from both facilities will be used by Reliance to purchase equipment relating to its petrochemicals business from suppliers in Korea and France. The company has $18.8 billion of bonds and loans outstanding, Bloomberg-compiled data show.