RIL to raise USD 2 billion

Mumbai, Feb 24 (UNI) The Reliance Industries Ltd, owned by Mukesh Ambani, has decided to raise USD 2 billion to finance the capital expenditure plan for oil and gas business through external commercial borrowings (ECB) by way of debt.

A decision to this effect was taken during the meeting of the Board of Directors of the company here today, a company spokesman said. In another decision taken by the board, the company will raise its equity further by way of preferential issue of 12 crore warrants exercisable into equal number of equity shares of Rs 10 each of the company to the promoters as per SEBI guidelines for preferential issues, subject to shareholders approval.

An amount equivalent to 10 per cent of the price would be paid on allotment of warrants and the remaining 90 per cent would be paid at the time of subscription to equity shares on exercise of rights attached to the warrants within a period of 18 months. On exercise of such rights the paid up capital of the company will increase from Rs 1393 crore to Rs 1513 crore.

Also, the company has decided to build one of the largest integrated cracker and petrochemicals complex with a total capacity of 2 mmtpa in SEZ at Jamnagar. This cracker will use refinery off gases and other byproducts as feedstock to manufacture ethylene, propylene and its downstream commodity and speciality derivatives.

The proposed facility will be built at a capital cost of USD 3 billion and is expected to go on stream by 2010-11.

Moreover, the company has appointed the eminent scientist and former director general of CISR (Centre for Scientific and Industrial Research), Dr R A Mashelkar, as an independent director on the company's board.

Commenting on the developments, the company's Chairman, Mukesh Ambani said, ''The board's approval to enhance the equity capital of the company by preferential issue of warrants to promoters demonstrates our commitment to value creation at Reliance''. The substantial enhancement of shareholders funds will take RIL to a higher growth platform by strengthening its capital structure, he hoped.

He expressed his happiness over increasing the company's investments in all its key businesses including oil&gas, refining, petrochemicals and retailing by both organic and inorganic growth initiatives.

UNI