RIL Signs Loan for up to USD 550 Million
OREANDA-NEWS. In continuation of the fund raising programme initiated in FY 2012-13, RIL has tied up Export Credit Agency (ECA) facility of up to USD 550 million co-financed by JBIC and a group of other Japanese banks backed by NEXI to part finance the proposed expansion of its petrochemical plants and setting up new gasification plant and refinery off-gas cracker over the next two to three years. This is RIL's eighth ECA facility for the largest capital expenditure program it has undertaken.
This is the first time that JBIC is extending credit to RIL. JBIC will provide direct financing of up to USD 330 million and Japanese banks, supported by a 95% NEXI insurance cover, will finance up to USD 220 million. The participating banks include The Bank of TokyoMitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Bank, Ltd. and three regional Japanese banks namely The Gunma Bank Ltd., The Hachijuni Bank, Ltd. and The Chiba Bank, Ltd.
This facility will have a door-to-door tenor of twelve years and will be used to finance contracts for imports of goods & services signed with more than 20 Japanese suppliers, including some SMEs and MMEs.
With this facility, NEXI has established a new insurance program that extends support to Japanese regional banks' for financing such overseas projects. In addition to the aforesaid six Japanese banks, some more banks (Japanese regional banks) are expected to participate through a partial assignment of the contractual rights and obligations of NEXI covered portion.
The deal is significant since:-
1. JBIC is financing a buyers' credit facility with more than 20 Japanese suppliers including SMEs and MMEs
2. NEXI cover is not only provided for regional Japanese banks participating as the primary lenders but also for the regional Japanese banks joining the deal through syndication process
Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with a turnover of INR 401,302 crore (USD 67.0 billion), cash profit of INR 30,795 crore (USD 5.1 billion) and net profit of INR 21,984 crore (USD 3.7 billion) as of March 31, 2014.
RIL is the first private sector company from India to feature in Fortune's Global 500 list of 'World's Largest Corporations' and currently ranks 107th in terms of revenues and 128th in terms of profits in 2013. RIL ranks 68th in the Financial Times' FT Global 500 list of the world's largest companies. RIL is ranked amongst the '50 Most Innovative Companies -2010' in the World in a survey conducted by the US financial publication - Business Week in collaboration with the Boston Consulting Group (BCG). In 2010, BCG also ranked RIL as the second highest 'Sustainable Value Creators' for creating the most shareholder value over the decade in the world.
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