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RIL gains as RJIL signs $1.5 billion syndicated term loan facilities

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Last Updated : Nov 18 2014 | 9:45 AM IST

Reliance Industries rose 0.98% to Rs 992.35 at 09:18 IST on BSE after the company's telecom operating unit Reliance Jio Infocomm signed syndicated term loan facilities aggregating to $1.5 billion.

The announcement was made after market hours on Monday, 17 November 2014.

Meanwhile, the S&P BSE Sensex was up 76.47 points or 0.27% at 28,254.35

On BSE, so far 14,530 shares were traded in the counter as against average daily volume of 3.12 lakh shares in the past one quarter.

The stock hit a high of Rs 992.95 and a low of Rs 986 so far during the day. The stock had hit a 52-week high of Rs 1,142.50 on 16 May 2014. The stock had hit a 52-week low of Rs 794 on 28 February 2014.

The large-cap firm has an equity capital of Rs 3234.81 crore. Face value per share is Rs 10.

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Reliance Industries telecom operating unit Reliance Jio Infocomm (RJIL) signed syndicated term loan facilities aggregating to $1.5 billion. The facility is guaranteed by Reliance Industries (RIL) and will be used to refinance the syndicated term loan facilities.

The facility was fully underwritten by an initial group of 15 core relationship banks that comprise the Mandated Lead Arrangers and Bookrunners (MLABs). The deal also witnessed significant over-subscription before it was launched into syndication and two banks joined in as MLAs.

The overall bank group saw participation from banks all over the world, including North America, Europe, Australia, Asia and the Middle East. The term loan syndication saw a total of 26 banks participate in the Facility.

The facility is significant on various counts as it comprises of $1 billion Facility I, which has a total maturity of 5.5 years and the $0.5 billion Facility II, which has a total maturity of 7 years. It represents the longest average maturity for an unsecured syndicated loan of similar size in Asia this year, RIL said. It has tied up at significantly better terms than the facilities being refinanced which were signed in 2010. The facility has seen tremendous response in syndication and raised over $400 million, the company said.

In compliance with Reserve Bank of India guidelines, the facility saw participation from only International banks. This was one of the rare occasions when the higher tenor 7-year facility saw a strong participation in syndication, RIL said.

Canada's Niko Resources at the time of announcement of its Q2 September 2014 results on Friday, 14 November 2014 said it is evaluating plans for its oil and gas assets in India.

Niko Resources said that there is uncertainty around the long-term natural gas price outlook in India and as a result, the company is evaluating its plans for its assets in India. RIL is the operator of the D6 Block, off the eastern coast of India with 60% stake. Niko owns 10% and BP Plc has a 30% stake in the block.

In October 2014, the Government of India announced its new domestic gas pricing policy effective 1 November 2014. The announced price for the period from November 2014 to March 2015 is a 33% increase over the price received previously and the company expects to receive a cash benefit of $4 million over this period related to gas sales from the MA field in the D6 Block in India, Niko Resources said in a statement. The new gas pricing guidelines indicate that for all discoveries after the issuance of these guidelines, in Ultra Deep Water Areas, Deep Water Areas and High Pressure-High Temperature areas, a premium would be given on the gas price determined as per the formula defined in the guidelines, with the premium to be determined as per prescribed procedure. The applicability of the premium to existing undeveloped discoveries in the D6 and NEC-25 blocks, such as the discoveries included in the approved plans of development for the R-Cluster and Satellite Areas, remains to be clarified, Niko Resources said. The development of these discoveries is dependent on the future long-term price outlook for gas sales from these projects and the uncertainty in this outlook could mean that the development of these reserves could be deferred and/or material reductions in the company's reported reserves or future net revenues could result, Niko Resources said.

RIL' s consolidated net profit rose 1.7% to Rs 5972 crore on 5.1% fall in total income to Rs 111806 crore in Q2 September 2014 over Q2 September 2013.

Reliance Industries is a part of Reliance Group and is into petroleum refining and marketing, exploration & production and manufacture of petrochemicals.

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First Published: Nov 18 2014 | 9:19 AM IST

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