Reliance Petroleum Ltd to borrow $1.5 billion

Reliance Petroleum Ltd has announced that the Company (the "Borrower"), a subsidiary of Reliance Industries Ltd ("RIL"), has mandated a group of Lead Arrangers to arrange a USD1,500 million Syndicated Term Loan Facility (the "Facility"). After a comprehensive due diligence, each of the 14 original mandated lead arrangers have obtained the necessary approvals for the Facility.

The Facility has now been fully underwritten by each of the 14 Original Mandated Lead Arrangers.

The Facility is India´s largest ever offshore syndicated loan financing. It comprises of a USD 950 million 7.5-year tranche and a USD 550 million 10-year tranche with a blended average life of 6.6 years. The US$ 1,500 Million syndicated loan facility is the single largest limited recourse financing mandated in the Asian markets in recent years, excluding China. This deal also represents the re-opening of the limited recourse finance market in India after almost a decade which has not seen significant recent cross border participation by international banks.

Proceeds of the Facility will be used to finance a new 580,000 barrels per day refinery and a 0.9 million tonnes per annum polypropylene unit (together the ´Project´). The Project will be located adjacent to RIL´s existing refinery at Jamnagar, Gujarat, India. After a highly successful Initial Public Offering by the Company in April 2006, this financing represents yet another milestone in achieving an early successful financial closure for the Project.

This landmark fundraising by the Company represents the largest offshore syndicated loan financing ever from India and the final maturity of ten years represents the longest maturity for any corporate term debt issuance out of India. The facility´s door to door tenor of 10 years will open a new window for Indian corporates since the maturity profile for the offshore syndicated loans has been largely restricted to 5-7 years.

The size and tenor of the transaction demonstrates the confidence of the international banking community in Reliance Industries Ltd and its impressive track record for the timely execution of Large complex projects.

Syndication will be launched on August 11, 2006. The Original Mandated Lead Arranger group will invite banks around the globe to participate in this landmark fund raising by the Borrower. General syndication is expected to be closed in early October.

Source : Equity Bulls

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