Reliance Industries Ltd., operator of the world’s biggest oil refinery complex, is offering an all-in rate of as much as 190 basis points for a U.S. dollar-denominated loan, two people familiar with the matter said.
The company plans to pay the interest and fees on a $500 million five-year portion of the borrowing, and an all-in rate of 175 basis points more than the London interbank offered rate on a $1.2 billion 6 1/2-year tranche, the people said, asking not to be identified because the details are private. The latter will be used to refinance debt, the people said.
Reliance Industries’ billionaire Chairman Mukesh Ambani told shareholders in June that he plans to spend 1.5 trillion rupees ($24 billion) over the next three years to expand businesses ranging from gas to telecommunications. The company has the equivalent of about $20.1 billion in bonds and loans outstanding, according to data compiled by Bloomberg.
Tushar Pania, a Mumbai-based spokesman for Reliance, couldn’t immediately be reached to comment on the company’s financing plans.
Some 18 banks will be involved in the $1.7 billion financing, the people said today. Some of the proceeds will also be used for capital expenditure, they said.
The $1.2 billion facility may be drawn in U.S. and Singapore dollars, euros and Japanese yen, and proceeds will help to refinance $1.2 billion of multicurrency loans signed in 2008, two people said July 31.
Some of the debt the company is seeking to refinance is paying an interest margin of 130 basis points more than Libor, Bloomberg-compiled data show.
Reliance Industries shares fell 0.9 percent to 818.15 rupees as of 1:06 p.m. in Mumbai.