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