Rpl Seeks Rs 1900cr Debt To Cover Jamnagar Overrun

Reliance Petroleum (RPL) has approached FIs for an additional assistance of Rs 1,900 crore to meet the increased cost of capacity expansion at its crude oil refinery in Jamnagar, Gujarat, from 9 million tonnes to 15 million tonnes per annum (mpta).

With the additional assistance of Rs 1,900 crore, RPLs exposure to the FIs will increase to about Rs 3,500 crore. As per the original plan, RPL had asked for an assistance to the tune of Rs 1,600 crore.

RPL had initially projected a cost of Rs 5,142 crore with a capacity of 9 mtpa. However, the project cost has gone up to Rs 8,694 crore as the company has decided to increase the capacity to 15 mtpa.

 

According to the original plan, Rs 1,600 crore of the borrowings was to be sourced by placing NCDs with the institutions. That apart, Reliance Capital and Finance Trust (RCFT) had proposed to fund Rs 493 crore under the original plan when the cost was Rs 5,142 crore. However, under the revised cost, the RCFT has reduced lease funds by Rs 193 crore to Rs 300 crore.

Company officials were not forthcoming on the means of finance. They commented only on the capacity, project cost and funds raised via Euro issue.

RPL approached the FIs for additional rupee term loan of Rs 1,900 crore at an interest rate of 17 per cent, said sources.

The company would be repaying the term loan in 20 quarterly installment commencing from October 1999. RPL is planning to commission the plant by March 2000.

The company has proposed to the institutions that the loan be disbursed by issuing letters of credit in favour of suppliers, contractors for an aggregate value of Rs 3,500 crore against the entire existing and proposed assistance.

Meanwhile, according to the companys balance sheet for 1995-96, the IDBI has already sanctioned Rs 620 crore from its share in of Rs 720 crore in the consortium finance.

Industry analysts say the RPL is leveraging the entire project on the rupee term loan at high rates of 17 per cent. That apart, the company has raised around $ 425 million (nearly Rs 1,448 crore) from the international markets. For this the company took the ECB route for nearly $300 million and for $125 million it opted for FCCB.

The FIs have sought a first charge on all present and future assets of the company, subject to prior charges in favour of companys bankers for their working capital borrowings.

However, RPL, in its balance she-et for 1995-96, has made a first charge for the triple-option convertible debentures (TOCD)

The TOCDs referred to in Schedule-B are secured by the first mortgage and charge in favour of the trustees on the companies present properties and will be secured by companys properties proposed to be acquired, excluding the current assets, receivable, inventories, book-debts (present and future), residential quarters and such other specific properties as are specifically charged and/or to be charged to any other person for any indebtedness or liabilities, present and future.