Dhirubhai Ambani's sons Mukesh and Anil to raise $2.5bn funds from international market
The Ambani brothers who came together to celebrate Dhirubhai's birth anniversary have both made plans to hit the international market for funds next month.
By Piyush Pandey, TNN | Updated:
MUMBAI: The Ambani brothers who came together to celebrate Dhirubhai Ambani's birth anniversary towards the end of 2011 have both made plans to hit the international market for funds next month. In January 2012, both brothers will tap the international markets to raise debt of over a couple of billion dollars. Mukesh Ambani-led Reliance Industries is in the market to raise $1 billion through bond issuance. The firm has roped in Citibank, Bank of America Corp. and UBS AG merchant bankers to the planned 10-year dollar bond issue.
Anil Ambani's Reliance Power will be knocking the doors of Exim banks of US and China to raise over $1.5 billion for its proposed power plants in Madhya Pradesh and Jharkhand.
Confirming this move, J P Chalashani, Reliance Power CEO said, "We are in the market to raise funds for our Chitrangini and Tiliya power projects. We will raise about $1.5 billion for our Tilaiya UMPP." The company is setting up these projects at cost of Rs 44,000 crore ($8.35 billion) and the company has already entered into agreements with the Export-Import bank of Us and China to borrow $17 billion to fund various power projects of the group. The Chinese and US Exim banks have already funded its Sasan and Symalkot power projects.
"RIL appears to be having some big acquisition plans for 2012. I don't see any other reason as to why a company with such a strong cash reserve should borrow," investment advisor S P Tulsian told TOI on RIL's bond issuance. RIL has already raised $3.5 billion through dollar-denominated term loans since August last year. At the end of September, it had cash and cash equivalents worth $12.6 billion. In October, it received another $5.2 billion from BP Plc.
Besides, it is estimated to generate operating cash flow of around $6 billion each year in the coming years. RIL fund raising plans surprise sector analysts. "The company has more cash than it can use. May be they are borrowing funds because of the low cost of funds overseas. They are talking to raise funds at 150-175 basis points above libor," said another analyst tracking RIL.
Anil Ambani's Reliance Power will be knocking the doors of Exim banks of US and China to raise over $1.5 billion for its proposed power plants in Madhya Pradesh and Jharkhand.
Confirming this move, J P Chalashani, Reliance Power CEO said, "We are in the market to raise funds for our Chitrangini and Tiliya power projects. We will raise about $1.5 billion for our Tilaiya UMPP." The company is setting up these projects at cost of Rs 44,000 crore ($8.35 billion) and the company has already entered into agreements with the Export-Import bank of Us and China to borrow $17 billion to fund various power projects of the group. The Chinese and US Exim banks have already funded its Sasan and Symalkot power projects.
"RIL appears to be having some big acquisition plans for 2012. I don't see any other reason as to why a company with such a strong cash reserve should borrow," investment advisor S P Tulsian told TOI on RIL's bond issuance. RIL has already raised $3.5 billion through dollar-denominated term loans since August last year. At the end of September, it had cash and cash equivalents worth $12.6 billion. In October, it received another $5.2 billion from BP Plc.
Besides, it is estimated to generate operating cash flow of around $6 billion each year in the coming years. RIL fund raising plans surprise sector analysts. "The company has more cash than it can use. May be they are borrowing funds because of the low cost of funds overseas. They are talking to raise funds at 150-175 basis points above libor," said another analyst tracking RIL.
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