RELIANCE TO REFINANCE DEBT

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

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.