Mukesh Ambani led Reliance Industries Limited (RIL) on Wednesday said that the company has tied up with a consortium of Japanese banks to raise $550 million (Rs 3,340 crore) to fund its $8 billion capital expenditure program.
The loan has been co-financed by Japan Bank for International Cooperation (JBIC) and a consortium of other Japanese banks led by Nippon Export and Investment Insurance (NEXI),the company said in a release.
Under the terms of the loan,Â JBIC will provide direct financing of up to $330 million and Japanese banks, supported by a 95% NEXI insurance cover, will finance up to $220 million.
The loan is in continuation of the fund raising programme initiated by the company in financial year 2012-13 and will be used to part finance the proposed expansion of its petrochemical plants and setting up of new gasification plant and refinery off-gas cracker over the next two to three years.
This isÂ RIL’s eighth ECA facility for the largest capital expenditure program it has undertaken,the release said.
The loan also marks JBIC first loan extension to RIL. The participating banks include The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd. and three regional Japanese banks — The Gunma Bank Ltd., The Hachijuni Bank, Ltd. and The Chiba Bank, Ltd.
The deal is significant since JBIC is financing a buyers’ credit facility with more than 20 Japanese suppliers including SMEs and MMEs. NEXI cover is not only provided for regional Japanese banks participating as the primary lenders but also for the regional Japanese banks joining the deal through syndication process, RIL said in a statement.
RIL’sÂ net profit rose 0.8% to Rs 5,631 crore on 13.1% growth in net sales to Rs 95,193 crore in Q4 March 2014 over same period last year.
RIL’s activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail and broadband services.