EDC provides $500 m financing to RIL
Financier and insurer of Canadian exporting companies, Export Development Canada (EDC) on Wednesday announced a USD 500 million financing for Indian private sector company Reliance Industries Limited (RIL).
According to the officials, the transaction is among the largest financing packages that EDC has ever extended in Asia.
"We have been partnering with a wide section of Canadian suppliers for materials, equipment and services across our hydrocarbon businesses over the last 4-5 years and we are also engaging with them for our telecom business rollout," said Srikanth Venkatachari, Reliance's Joint Chief Financial Officer.
Venkatachari said, "We have more than a decade-long relationship with EDC, and this landmark deal will provide further impetus to foster trade between RIL and Canadian companies over the coming years."
EDC provided the financing in response to the increasing business that RIL has been undertaking with Canadian companies since 2004, when EDC first became one of their financiers.
The new financing package helps diversify RIL's funding sources and extends the maturity profile of its long- term debt in a cost effective manner, the officials informed.
"RIL is a global leader in many sectors that matches up well with the Canadian industrial expertise, creating a natural partnership that benefits both of our priority interests," said
Rajesh Sharma, EDC's Senior Vice-President and Global Group Head, Business Development.
Sharma said, "A strong relationship with EDC helps the RIL Group benefit from a global source of mature and dependable financing in a capital-constrained global economy."
He added, "In turn, EDC introduces Canadian companies to RIL that not only meet their specific supply chain needs, but that can help them grow their global business. Everybody wins in this deal."
Since 2010, RIL has been regularly doing business with approximately 50 Canadian companies.
Of these companies, 33 percent were small- to medium-sized companies. EDC has been actively engaged with RIL in making introductions to Canadian capabilities.
According to the officials, India is a strategic market for Canada, as outlined in the Government's Global Market Action Plan, and is also a market of corporate priority for EDC.
EDC is looking to grow the amount of financing that it offers to Indian companies for their capital expenditures, whether the financing be for general corporate purposes or project finance purposes.
Canadian and Indian companies used the EDC's financial services to undertake CAD 1.8 billion of business in 2013 alone.
(Posted on 02-04-2014)