Reliance Industries Ltd has raised a term loan of $573 million to partially finance the construction of its six very large ethane ships, the company said in a statement on Tuesday. “RIL has ordered six very large ethane carriers (VLECs), the largest ethane vessels ever built in the world,” the company said in its statement to the source. “The facilities (loan) with door to door tenor of 12 year comprise of a Korea Trade Insurance Corp (K-sure) insured tranche of $286.5 million and a commercial tranche of $286.5 million," RIL added in the statement.
Construction of these vessels is part of RIL’s larger investment strategy in the refining and petrochemical business. The ethane gas imported using these veseels will be used for feeding RIL's crackers at Dahej, Hazira and Nagothane. This will ensure consistent supply of ethane at competitive prices, the company said in its statement. The loan facilities will be secured against the respective vessels. Construction of these vessels, the company said, will be financed through a 80:20 debt to equity ratio.
The company in its statement added both tranches of the facilities were oversubscribed by two times and saw participation from seven banks in K-sure covered tranche and six banks in the commercial tranche.
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, Societe Generale, Sumitomo Mitsui Banking Corp, The Bank of Tokyo-Mitsubishi UFJ Ltd, Credit Agricole Corporate and Investment Bank and JP Morgan Chase Bank NA are some of the banks which participated in the facility.