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Updated: January 11, 2010 19:58 IST

RIL readies LyondellBasell bid; raises $2 bn

PTI
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Chairman of Reliance Industries Limited (RIL) Mukesh Ambani.
PTI Chairman of Reliance Industries Limited (RIL) Mukesh Ambani.

Reliance Industries on Monday sold shares to mop up $764 million, the third sale in four months that has created a war chest of over $2 billion for its bid to acquire the bankrupt petrochemical firm LyondellBasell.

In a block deal, RIL sold as many as 3.3 crore treasury stocks at Rs. 1,050 a piece, a discount of nearly five per cent to Friday’s closing, and raised Rs. 3,465 crore ($764 million).

This followed the 2.59 crore treasury stocks it sold last Monday fetching Rs. 2,675 crore. Last September too, it had sold 1.5 crore shares raising Rs. 3,188 crore.

These three sales have resulted in the Mukesh Ambani-led company raising over Rs. 9,300 crore ($2.5 billion) in cash.

RIL, last week, had raised its bid to acquire LyondellBasell to $13.5 billion from the initial $12 billion offered in November.

Credit rating agency Moody’s said following today’s sale, the company has a cash balance of around $4.5 billion and treasury shares worth about $6.5 billion.

“The company is effectively building up a war chest to fund the expansion opportunities. Moody’s thus expects RIL to progressively use its increased financial flexibility for acquisitions, rather than use the proceeds of the share sale to pay down debt,” Moody’s lead analyst Ivan Palacios said.

The rating agency also did not see any immediate impact on the company’s ratings and stable outlook.

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