Mumbai, Nov 20 (PTI) Reliance Industries, the mostprofitable company as also the largest borrower, has hit theoverseas debt market with a USD 800-million bond saleprogramne as it seeks to pare a portion of its high cost debtthat stands at over Rs 2.14 trillion.
"Reliance has hit the overseas debt market with a USD800 million issue," investment banker told PTI, requesting notto be quoted as the issue is yet to be priced and closed.
Meanwhile, rating agency Moody's today ssingend a Baa2rating to the proposed unsecured bond sale by RIL. The bondswill rank pari passu with RIL's other existing and futureunsecured and unsubordinated obligations, it said assigningthe Baar rating.
It can be noted that for the September quarter, RIL,which has a market capitalisation of close to Rs 6 trillion,had a cash pile of Rs 77,014 crore and a debt of Rs 2,14,145crore, up from Rs 1,96,601 crore in the previous quarter.
The Mukesh Ambani-led RIL has been borrowing heavilyfor expansion and entry into telecom space with Reliance Jiointo which it has invested over Rs 1.4 trillion. That apart ithas also pumped in over Rs 1 trillion into its core refiningand petrochemicals expansion which is now completed.
"The Baa2 rating reflects RIL's ability to generateoperating cash flows, with annual Ebitda of over USD 10billion from its large-scale integrated refining andpetrochemical operations that generate strong margins, and itsnascent but growing digital services business," said VikasHalan, a vice-president and senior credit officer at Moody's.
The rating also incorporates the increase in RIL'sbusiness risk because of its growing digital services businessand our expectation that high cash outflow for capitalspending will keep its free cash flow negative over at leastnext 18 months", added Halan, who is also Moody's lead analystfor RIL.
Early November, Moody's had lowered RIL's creditrating outlook to stable while affirmed its overall ratings,citing likely negative free cash flow due to heavy debtrepayments over the next 18 months.
Moody's had said RIL would see large cash outflow overthe next 18 months towards paying back its creditors for thebillions of dollars of capex it had incurred on telecom andrefining and petchem expansions. This would lead RIL to tapthe debt market more as a result of which it would not be ableto reduce its debt and also its free cash flow to be in thenegative territory for next 18 months or so, Moody's had said.
"Such payments along with additional capex towardstelecom will constrain any reduction in net borrowings untilfiscal 2019," Moody's had warned.
"Accordingly, we've revised our outlook on RIL'slong-term issuer rating to stable from positive, but theoutlook on its foreign currency senior unsecured rating ismaintained at stable," Moody's had said.
Moody's expects Jio, which reported a Rs 260 croreoperational profit in Q2 with a Rs 271 crore net loss, to turnin first set of profits in the current fiscal itself.
The oil-to-telecom conglomerate reported a 12.5 percent jump in Q2 net after refining margin soared to anine-year high and telecom venture earned operational profit.
It earned a net income of Rs 8,109 crore, or Rs 13.7per share as it could earn USD 12 on turning every barrel ofcrude oil into fuel, up from USD 10.1 a barrel gross refiningmargin in same quarter of previous year and USD 11.9 a barrelin first quarter of the current fiscal. Total revenue was up23.9 per cent to Rs 1,01,169 crore. PTI BEN DSK BENBEN.
This is unedited, unformatted feed from the Press Trust of India wire.