RE­LIANCE TO RE­FI­NANCE DEBT

In­dia’s largest com­pany may also tap bond mar­ket, say of­fi­cials

New Straits Times - - Business -

RE­LIANCE In­dus­tries Ltd plans to re­fi­nance a sig­nif­i­cant por­tion of about US$12 bil­lion (RM51.36 bil­lion) of bor­row­ings that ma­ture over the next three years and may sell bonds to re­pay the debt, ac­cord­ing to com­pany ex­ec­u­tives with knowl­edge of the mat­ter.

In­dia’s largest com­pany by mar­ket value will re­pay some of the debt com­ing due, mostly bonds and in­ter­est, said the of­fi­cials.

Re­liance’s re­pay­ments from next year through 2020 will be its big­gest for any pre­vi­ous three­year pe­riod and in­clude US$8.14 bil­lion of term loans, US$3.52 bil­lion of bonds and a US$300 mil­lion re­volver loan, ac­cord­ing to data com­piled by Bloomberg.

It also has about US$1.65 bil­lion of in­ter­est pay­ments.

Re­liance’s bor­row­ings have bal­looned over the past five years as the group in­vested in build­ing its telecom busi­ness, a pet coke gasi­fi­ca­tion unit and in ex­pand­ing petro­chem­i­cals ca­pac­i­ties.

The plan to tap the bond mar­ket is part of a larger trend that’s seen In­dian cor­po­rates choos­ing bonds over loans for the first time in at least a decade.

One of the fastest eco­nomic growth rates in the world and Prime Min­is­ter Naren­dra Modi’s re­forms have at­tracted global funds to In­dia, re­duc­ing costs for is­suers.

Con­trolled by sec­ond-rich­est Asian Mukesh Am­bani, Re­liance has suf­fi­cient cash though it won’t use it to re­pay ma­tur­ing debt as the com­pany’s credit rat­ings and strong fi­nances en­able it to raise funds at com­pet­i­tive rates, said the peo­ple.

S&P Global Rat­ings has a “BBB+” score on Re­liance’ s long-term debt, two lev­els above the sov­er­eign, while Moody’s has the com­pany at “Baa2”, a notch above the In­dian gov­ern­ment.

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