In order to fund its exploration activity and also for the expansion of its petrochemical business, Reliance Industries (RIL) is in the process of borrowing up to $500 million (Rs 2,701 crore) through issue of perpetual bonds to foreign investors.
The company decided to borrow abroad despite sitting on a cash pile of around Rs 75,000 crore because it wants to use the low interest rates in the foreign markets to cut costs of its debt.
Some reports suggest that based on the response of the investors, the company may decide whether to increase the size of the bond issue.
It is learnt that the company may price the bonds at six per cent, which can be bought back by the company after five years. Reliance is one of the top fund raisers from India in the foreign markets for expansion projects. The company has planned expansion of its petrochemicals complex, which will cost it close to $10 billion.
The firm is drilling a development well in the satellite fields and plans to file an integrated field development plan (IFDP) in the current quarter.
When developed, IFDP will drive new volumes after FY16. Meanwhile, Standard & PoorÂ’s (S&P) ratings services assigned its ‘BBB’ long-term issue rating to RelianceÂ’s proposed US-dollar-denominated senior unsecured perpetual notes.
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