Reliance Industries rose 1.52% to Rs 955.50 at 12:31 IST on BSE after the company said that Export Development Canada has announced $500 million in financing for the company.
The announcement was made during trading hours today, 2 April 2014.
Meanwhile, the S&P BSE Sensex was up 85.39 points or 0.38% at 22,531.83.
On BSE, so far 2.81 lakh shares were traded in the counter as against average daily volume of 4.24 lakh shares in the past two weeks.
The stock was volatile. The stock rose as much as 1.82% at the day's high of Rs 958.35 so far during the day, which is a 52-week high for the counter. The stock lost as much as 0.27% at the day's low of Rs 938.55 so far during the day.
Reliance Industries (RIL) said that Export Development Canada (EDC), Canada's leading financier and insurer of Canadian exporting companies, today, 2 April 2014, announced $500 million in financing for the company. The transaction is among the largest financing packages that EDC has ever extended in Asia, RIL said in a statement.
Srikanth Venkatachari, Reliance's Joint Chief Financial Officer said, "We have been partnering with a wide section of Canadian suppliers for materials, equipment and services across our hydrocarbon businesses over the last 4-5 years and we are also engaging with them for our telecom business rollout. We have more than a decade-long relationship with EDC, and this landmark deal will provide further impetus to foster trade between RIL and Canadian companies over the coming years".
EDC provided the financing in response to the increasing business that RIL has been undertaking with Canadian companies since 2004, when EDC first became one of their financiers, RIL said. The new financing package helps diversify RIL's funding sources and extends the maturity profile of its long- term debt in a cost effective manner, RIL said in a statement.
Rajesh Sharma, EDC's Senior Vice-President and Global Group Head, Business Development said, "RIL is a global leader in many sectors that match up well with Canadian industrial expertise, creating a natural partnership that benefits both of our priority interests".
Mr. Sharma added, "A strong relationship with EDC helps the RIL Group benefit from a global source of mature and dependable financing in a capital-constrained global economy. In turn, EDC introduces Canadian companies to RIL that not only meet their specific supply chain needs, but that can help them grow their global business. Everybody wins in this deal".
Since 2010, RIL has been regularly doing business with approximately 50 Canadian companies. Of these companies, 33% were small- to medium-sized companies. EDC has been actively engaged with RIL for making introductions to Canadian capabilities, RIL said in a statement.
EDC is Canada's export credit agency, providing financing and insurance solutions locally and around with world to help Canadian companies of any size respond to international business opportunities.
RIL on Tuesday, 1 April 2014, said that the Supreme Court has appointed an international arbitrator in the KG D6 issue. Australia's Justice Mr. James Spigelman will be the third arbitrator and shall be the Chairman of the Arbitration Tribunal, RIL said. The Government of India had opposed the appointment of an international arbitrator, whereas RIL had submitted that the third arbitrator can be an International Arbitrator not being from India, Britain or Canada, where the three stakeholder companies are based. RIL has a 60% stake in the KG D6 block, Britain's BP has a 30% stake and Canada's Niko has a 10% stake.
India's Supreme Court has accepted RIL's argument and appointed Justice Mr. Spigelman, a former Chief Justice of New South Wales in Australia from 1998 to 2011. Poland-born Justice Spigelman has rich experience in the field of corporate affairs, insurance, arbitration and international law, the company said.
According to the Production Sharing Contract (PSC) signed between the Government of India and RIL, the Arbitration Tribunal must comprise three arbitrators. Of these, contractor (RIL, BP and Niko) and the Government of India are allowed to appoint one Arbitrator each, while the third arbitrator must be mutually appointed by both appointed arbitrators. However, the two appointed arbitrators were unable to reach an agreement on the appointment of the third arbitrator and hence RIL had to approach the Supreme Court, the company said.
With the constitution of the Arbitration Tribunal, the path has been cleared for a speedy resolution of various disputes relating to the KG D6 block, RIL said. The dispute arose when the recoverable gas from the field was found to be lesser than the initial estimates. Post this development, the central government had wrongfully sought to disallow recovery of full costs incurred by RIL in the block. As a result, RIL was compelled to proceed with arbitration. But since there was no consensus on the appointment of the third arbitrator, RIL had to approach the Supreme Court, the company said.
Both RIL and the Government of India are bound by the PSC. According to the PSC, any dispute between the parties can be resolved only through the process of arbitration. "We are hopeful that the constitution of the Arbitration Tribunal will silence the vested interest groups which are unreasonably raising this issue across the country," RIL said.
RIL's net profit rose 0.2% to Rs 5511 crore on 10.3% growth in net sales to Rs 103521 crore in Q3 December 2013 over Q3 December 2012.
RIL's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail and broadband services.
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