Reliance Petro raises $ 2bn debt from 14 banks

Reliance Petroleum (RPL) today signed a deal with a consortium of 14 international banks for a loan of $2 billion to finance its Jamnagar refinery.

This is part of the $3.5 billion debt that the company plans to pick up for the refinery. Of the total project cost of $ 6.1 billion, $3.5 billion is the debt component and $ 2.5 billion is the equity component.

The present loan of $2 billion is 33% higher than the originally planned $1.5 billion loan. The rest of the loan is expected to be picked up next year.

Reliance Petro hired 14 banks to arrange the loan, including Bank of Tokyo-Mitsubishi UFJ, ABN Amro Holding, Bank of America, BNP Paribas, Calyon, Citigroup, DBS Group Holdings, DZ Bank, HSBC Holdings, ICICI Bank, Mizuho Corporate Bank, Standard Chartered, State Bank of India and Sumitomo Mitsui Banking Corp. The banks brought in 36 other lenders.

Reliance Petro is expanding its 660,000 barrel-a-day refinery, which has helped Reliance Industries more than triple its annual profit since the plant opened in 1999.

The new project will be located next to the existing refinery and will be  able to process 580,000 barrels of oil a day and 900,000 tons a year of polypropylene, the company said in a statement on August 11.

Reliance Petro got more than $3.4 billion in commitments from 50 lenders after meetings in Singapore, Hong Kong, Taipei, Dubai and Bahrain from Aug. 25 to Aug. 30, said the banker, who declined to be identified before an official announcement.