Ambani’s Reliance Said to Hire 18 Banks for $1.09 Billion Loan

By Katrina Nicholas - Jun 17, 2011

Reliance Industries Ltd. (RIL), India’s biggest company by market value, hired 18 banks for a five-year term loan of $1.09 billion to be used for refinancing debt, according to a person familiar with the matter.

Reliance, controlled by billionaire Mukesh Ambani, plans to replace debt maturing in about two years that has higher interest costs, another person familiar with the matter said last month. Reliance borrowed $1 billion in December and paid a margin of 195 basis points more than the London interbank offered rate, according to data compiled by Bloomberg.

The facility being organized by banks currently will pay a margin of about 150 basis points, one of the people said today, asking not to be identified as the details are private.

Mumbai-based Reliance, India’s fourth-most indebted company, has the equivalent of $10.2 billion of loans maturing before the end of 2017, Bloomberg data show. The petrochemical and textiles maker is seeking to expand in the financial services business as demand increases in the world’s second-fastest growing major economy.

The banks hired include Australia & New Zealand Banking Group Ltd. (ANZ), Bank of America Corp. (BAC), Bank of Nova Scotia (BNS), Bank of Tokyo-Mitsubishi UFJ Ltd., Banco Bilbao Vizcaya Argentaria SA (BBVA), Barclays Plc (BARC), BNP Paribas (BNP) SA, Citigroup Inc. (C), Credit Agricole CIB, DBS Group Holdings Ltd. (DBS), DnB NOR ASA (DNBNOR), HSBC Holdings Plc (HSBA), Intesa Sanpaolo SpA (ISP), Mizuho Financial Group Inc. (8411), Royal Bank of Scotland Group Plc (RBS), Standard Chartered Plc (STAN), State Bank of India (SBIN) and Sumitomo Mitsui Banking Corp., one of the people said.

Ambani is the world’s ninth-richest man with an estimated wealth of $27 billion, according to Forbes magazine. Reliance sold $1 billion of 10-year, 4.5 percent dollar-denominated notes and $500 million of 30-year, 6.25 percent bonds in October, Bloomberg data show.

To contact the reporter on this story: Katrina Nicholas in Singapore on knicholas2@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net