Reliance Industries raises $573 million for six ethane vessels

Mumbai: Reliance Industries Ltd (RIL) has raised a term loan of $573 million to part finance the construction of six ships for transportation of ethane from the US, the company said on Tuesday.

RIL has ordered six very large ethane carriers (VLECs), which would transport ethane from the US to Dahej in Gujarat. The gas will be used to feed RIL’s crackers at Dahej, Hazira and Nagothane.

“The facilities (loan) with door-to-door tenor of 12 years comprise of a Korea Trade Insurance Corp (K-sure) insured tranche of $286.5 million and a commercial tranche of $286.5 million. The facilities shall be secured by collateral of respective VLECs,” RIL added.

The VLECs are financed in a debt-to-equity ratio of 80:20.

“Despite global slowdown in the shipping industry, both tranches of the facilities (loan) were oversubscribed by two times and saw participation from seven banks in K-sure covered tranche and six banks in the commercial tranche. This reflects the strong credit standing of RIL in the international financial markets,” RIL said.

Banks lending to RIL include The Hongkong and Shanghai Banking Corp Ltd, Standard Chartered Bank, Banc of America Leasing & Capital LLC, Australia and New Zealand Banking Group Ltd, Citibank, DBS Bank Ltd, BNP Paribas and Societe Generale.