Reliance Industries to borrow $2.7 bn abroad to repay its high-cost debt

RIL, which last week reported a 7.6 per cent jump in its fiscal first quarter net profit at Rs8,820 crore ($1.3 billion), helped by strong performance of its petrochemicals segment and the turnaround at its telecom venture Reliance Jio Infocomm.

Mukesh Ambani-led RIL’s revenue for the quarter increased by 41 per cent to Rs99,318 crore ($14.5 billion) Profit before depreciation, interest and taxes increased by 27.5 per cent to Rs17,222 crore ($2.5 billion) while profit before tax increased by 16.7 per cent to Rs12,322 crore ($1.8 billion).

But, the company saw its debt refinancing cost jump more than three-fold to Rs3,555 crore.  

As of end-June 2018, the company had an outstanding debt of Rs2,42,116 crore, up from Rs2,18,763 crore in March, while cash in hand marginally rose to Rs79,492 crore.

The company had spent around Rs22,000 crore in capex during the quarter mostly into its telecom venture, which reported a net profit of Rs612 crore for the April-June 2018 quarter – a 19.9 per cent growth over the previous quarter.

The money will be raised in multiple tranches and will be used to refinance some of our existing high cost forex debt. Reliance has sought shareholders approval to issue redeemable non-convertible debentures at its 5 July AGM.

More than half of Reliance’s around $34 billion debt is due for repayment by 2022, while around $13 billion is maturing from 2018 through 2020. Most of the outstanding debt is denominated in foreign currencies.