ABN Amro syndicates $250 mn Reliance Petro L/c

MUMBAI, JUNE 26: ABN Amro Bank has concluded the syndication of a $250 million letter of credit (Lc) facility for Reliance Petroleum Ltd (...

MUMBAI, JUNE 26: ABN Amro Bank has concluded the syndication of a $250 million letter of credit (Lc) facility for Reliance Petroleum Ltd (RPL). The transaction, concluded last week, is the first-ever of its kind, and will finance RPL’s import crude oil imports for the next two months.

ABN Amro Bank is the arranger, issuer and confirming bank to the transaction. The following banks have also participated in the syndication: Toronto Dominion Bank, Credit Lyonnais, Barclays Bank Plc, Fuji Bank, ICICI Bank, Syndicate Bank, Punjab National Bank (PNB), Bank of Baroda (BoB), Bank of India (BoI) and Union Bank of India.

While arranger ABN Amro Bank took a $40 million exposure, co-arrangers Fuji Bank and Credit Lyonnais took $30 million each; Toronto Dominion Bank, PNB, ICICI Bank $25 million each; BoB and BoI $20 million each with Syndicate Bank at $15 million. Lead managers, Barclays Bank Plc and Union Bank of India took on $10 million each. Sources close to the deal said more such transactions are likely in future.

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RPL has a 27 million-tonne refinery in Jamnagar (Gujarat), which was commissioned recently. The company currently accounts for over 25 per cent of the refining capacity in India. "The $250 million crude oil import facility covers the issue of L/cs to facilitate imports of crude oil from international suppliers for RPL’s refinery at Jamnagar (Gujarat)," ABN Amro Bank said in a press statement issued here today.

RPL has planned a marketing joint venture with Indian Oil, which is expected to be formalised during the next few months once the Centre gives its nod. The biggest plus with this arrangement is IOC’s wide retail network of over 7,000 retail outlets which will be a strong base for RPL’s marketing efforts.

The company has, in any case, indicated that it is keen on acquiring IBP, the stand-alone oil marketing PSU, which the government plans to sell during the current fiscal. RPL was equally open to the idea of buying out either Bharat Petroleum Corporation or Hindustan Petroleum Corporation which, apart from combined refining capacities of 16 million tonnes, have 4,500 retail outlets apiece.