Ril To Save 1% Interest Via Buyback

Reliance Industries expects to save close to one percentage point (100 basis points) on interest costs by buying back bonds worth $400 million from the international market. The bonds were due to mature in 2005, 2007 and 2008.

The company, with a cash flow of Rs 7,000 crore, is extinguishing the bonds to reduce its cost of capital.

The buyback offer, the first of its kind among Indian corporates, is different from the premature termination of an instrument by exercising the call option. In the buyback offer, the investor has the freedom to reject the issuer