RIL to Raise up to 10k crore via Debt Route to Fund Capex

The Economic Times - - Economy - RACHITA PRASAD

En­ergy ma­jor Re­liance In­dus­tries plans to raise up to .` 10,000 crore by way of debt in 2014-15 to fi­nance its cap­i­tal ex­pen­di­ture. RIL will seek share­hold­ers’ ap­proval at its 40th AGM on June 18 to au­tho­rise the board to raise funds through non-con­vert­ible deben­ture in one or more tranches. It is also seek­ing share­hold­ers’ ap­proval to ap­point Nita Am­bani as a di­rec­tor. Nita Am­bani heads the Re­liance Foun­da­tion and has been in­volved in many ac­tiv­i­ties, in­clud­ing RIL’s cor­po­rate so­cial re­spon­si­bil­ity spend­ing, which was .` 712 crore last fis­cal, or more than 3% of its profit. “We are im­ple­ment­ing sev­eral projects both in the man­u­fac­tur­ing do­main and ser­vice sec­tor to con­tinue the tra­di­tion of cre­at­ing sig­nif­i­cant share­hold­ers’ value,” chair­man and man­ag­ing di­rec­tor Mukesh Am­bani was quoted as say­ing in the an­nual re­port. The res­o­lu­tion for fund rais­ing did not elab­o­rate on which of its projects the money would be used. “In or­der to aug­ment long term re­sources for fi­nanc­ing the on­go­ing cap­i­tal ex­pen­di­ture and for gen­eral cor­po­rate pur­poses, the com­pany may of­fer or in­vite sub­scrip­tion for se­cured or un­se­cured re­deemable non-con­vert­ible deben­tures, in one or more se­ries/ tranches on pri­vate place­ment, is­suable/ re­deemable at par,” RIL said in its an­nual re­port for 2013-14. “We have a strong bal­ance sheet to sup­port our am­bi­tious growth plans,” Am­bani said. RIL’s cash and mar­ketable se­cu­ri­ties stood at .` 88,190 crore as on March 31, 2014, against .` 82,975 crore at the be­gin­ning of the year. Its to­tal debt in­creased to .` 89,968 crore at the end of FY14 from .` 72,427 crore a year ago. RIL moved from a net cash po­si­tion at the be­gin­ning of FY14, to a mar­ginal net debt level dur­ing the course of the year as the com­pany drew down on fund­ing to part fi­nance the ex­pan­sion of its petro­chem­i­cal ca­pac­i­ties and set­ting up the new gasi­fi­ca­tion plant and re­fin­ery off-gas cracker over the next two to three years. “One of RIL’s key strate­gies, go­ing for­ward, is set­ting up the pet­coke gasi­fi­ca­tion projects which is ex­pected to put RIL’s en­ergy and hy­dro­gen costs at par or bet­ter than the re­finer­ies in the US, where nat­u­ral gas prices have fallen dra­mat­i­cally with the shale gas revo­lu­tion,” the com­pany said. In its petro­chem­i­cals busi­ness, RIL is in the process of ex­pand­ing across its value chain over the next two year. “With these ex­pan­sions, RIL is ex­pected to emerge as the third largest pro­ducer of PTA (pu­ri­fied tereph­thalic acid) and the sec­ond largest pro­ducer of PX (Paraxy­lene) in the world,” Re­liance In­dus­tries said. In its oil and gas ex­plo­ration and pro­duc­tion busi­ness, RIL said it awaits de­ci­sion on gas pric­ing for the KG-D6 block. Re­liance In­dus­tries, along with its part­ners BP and NIKO have is­sued a no­tice of ar­bi­tra­tion to the govern­ment of In­dia seek­ing im­ple­men­ta­tion of the re­vised price for gas pro­duced from the Kr­ishna Go­davari basin (KG-D6). The com­pany is bullish on its re­tail busi­ness given the mar­ket po­ten­tial in In­dia. RIL added 225 store in the last one year. In its dig­i­tal busi­ness, the com­pany said it has en­tered into sev­eral tele­com in­fra­struc­ture shar­ing pacts with dif­fer­ent oper­a­tors so that it can roll out the 4G ser­vices while pre­serv­ing its cap­i­tal.

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