RIL rights issue: Pay 25% now, 75% next year Tech firms sweeten deals for US banks
New Delhi, May 18: Reliance Industries shareholders will have to pay only 25 per cent for subscribing to the company's mega Rs 53,125-crore rights issue, and the balance will have to be paid in two installments in May and November next year, the company said.
RIL's rights issue will open for subscription on May 20 and will close on June 3. One share will be offered for every 15 shares held at Rs 1,257.
Of the Rs 1,257 per share price, only 25 per cent is to be paid at the time of subscription. A similar amount will be due for payment in May 2021 and the balance 50 per cent has to be paid in November 2021, the company said in a regulatory filing.
"The rights issue committee of the board of directors, in its meeting held on May 17, 2020, has proposed the following schedule for payment of the balance amount of Rs
942.75 per rights equity share—Rs 314.25 i.e. 25 per cent in May 2021; and Rs 628.50 i.e. the balance
50 per cent in November
2021," it said.
The board, it said, would make the calls for this purpose at the relevant time.
Top technology services firms are offering payment deferrals, discounts of up to 20 per cent and other sweeteners to some U.S. banks to keep their business as the pandemic forces Wall Street to cut tech budgets, according to executives involved in the talks.
Large Wall Street banks are widely expected to reduce overall budgets and discretionary tech spending, which includes areas such as technology consulting services, business analytics, research and design and process management projects.
Accenture, Tata Consultancy Services, Infosys and Cognizant Technology Solutions—among the world's largest tech services vendors—have offered to do more for them at lower rates, three executives who have taken part in the discussions told Reuters.
The aim is to secure new contracts as well as to keep the relationships with the banks ticking over so that they can be expanded once more post-pandemic, they added.
At least half a dozen meetings have taken place over the past month between the tech companies and some of the largest US banks including JPMorgan Chase & Co,
Bank of America and Citigroup, said the executives who all requested anonymity as the discussions were confidential.
"The current crisis facing the IT industry is potentially bigger than the 2008 recession. We have no option but to use every tactic necessary, including heavy discounts, to gain a competitive edge," said one.
Major IT outsourcing contracts, which include software maintenance, cloud computing and analytics, are worth several hundreds of millions of dollars and typically stretch over many years.
As well as some discounts and payment deferrals of typically between one to four months, the tech firms are in some cases offering to buy up computer data centres from their clients and the existing systems and hardware that are being replaced or upgraded at banks.