RIL Raises USD 2 Billion, 13 Year Loan Backed by Euler Hermes

OREANDA-NEWS. May 10, 2012. Reliance Industries Limited ("RIL") has signed a USD  2 billion equivalent loan with nine banks covered by Euler Hermes Deutschland AG. ("Euler Hermes") on 07 May 2012 at Berlin, Germany.

The loan will be primarily used to finance goods and services procured from German suppliers as part of RIL's petrochemicals expansion projects at Jamnagar, Hazira, Silvassa and Dahej in India.

This facility is significant on various counts:

The facility is among the largest underwriting by Euler Hermes in recent years; Euler Hermes has for the first time accorded 'Better than Sovereign' rating to a corporate; Despite the challenging financial markets, the deal witnessed ~ 50% over subscription; The facility has a door-to-door maturity of 13 years;

This deal helps diversify RIL's funding sources and extends the maturity profile of its long term debt in a cost effective manner.

V. Srikanth, Joint Chief Financial Officer of RIL, commented "We are delighted with the support provided by Euler Hermes for this landmark financing. This deal received strong support from international banks, particularly from German lending institutions. The better than sovereign assessment by Euler Hermes is a strong testimony of RIL's credit standing in the international markets."

KfW IPEX-Bank GmbH arranged the Euler Hermes cover and the following nine banks participated in the funding of the facility.

Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with a turnover of INR 339,792 crore (USD  66.8 billion), cash profit of INR 31,994 crore (USD  6.3 billion) and net profit of INR 20,040 crore (USD  3.9 billion) as of March 31, 2012.