(Repeats to add Update tag)
* Sells 33 mln shares at 1,050 each, 5 pct discount
* Company raises $2 bln in stock sales in under 4 mths
* Shares fall 1 pct after dropping as much as 4.8 pct
* Share sale to be last of block trade by co. for a
(Adds analyst comment, details, background)
By Tony Munroe and Pratish Narayanan
MUMBAI, Jan 11 Indian energy major Reliance
Industries Ltd (RELI.BO) raised $763 million on Monday, its
third big equity fund raising in under four months, as it
readies to buy bankrupt petrochemicals firm LyondellBasell.
Reliance, controlled by India's richest man, Mukesh Ambani,
sold 33 million existing treasury shares at about 5 percent
discount to a clutch of foreign institutional investors, the
arranger to the deal said.
The deal follows a $577 million share sale last week to
state-run Life Insurance Corp of India [ID:nSGE60304C] and a
$660 million share sale by India's largest listed company in
The deals are seen as part of Reliance's bid to take
control of Luxembourg-based LyondellBasell [ACCEIN.UL].
Last week, a source told Reuters Reliance had sweetened its
offer to buy a controlling stake that valued LyondellBasell at
$13.5 billion compared to its earlier bid of $12 billion. But
Lyondell's board had rejected Reliance's sweetened offer, the
Wall Street Journal reported. [ID:nSGE607054]
"They need the funds for acquisitions - it could be either
Lyondell or any other company," said Prayesh Jain, oil & gas
analyst at brokerage India Infoline.
"They do not want to stretch their balance sheet too
much... They are obviously thinking of keeping their balance
sheet as clean as possible in case they need to raise debt
Reliance has interests in petrochemicals, refining, oil and
gas exploration and retail, and a deal with Lyondell would
catapult it into the ranks of top petrochemical makers such as
Saudi Arabia's SABIC 2010.SE, Germany's BASF BASF.DE and
U.S.-based Dow Chemical Co (DOW.N).
Acquiring LyondellBasell would also give Reliance a leg up
in its efforts to gain greater access to the U.S. and European
markets. Its bid comes as petrochemical and refining asset
prices have fallen globally in the wake of the financial
The latest share sale was priced at 1,050 rupees, or 5
percent below Reliance's closing price on Friday.
Shares in the company, valued by the market at $79.3
billion, lost 1 percent at 1,091.55 by 0439 GMT, after sliding
as much as 4.8 percent after the block deal.
UBS was the sole arranger for the trade. Its India country
head Manisha Girotra told Reuters the share sale would be the
last of block trades by the company for a while.
Lyondell filed for bankruptcy protection last January after
being unable to meet its debt obligations when demand dropped
for petrochemical products during the global economic downturn.
In December, LyondellBasell filed an amended reorganisation
plan with a U.S. court, proposing a $2.8 billion rights issue,
to simplify its corporate structure and exit bankruptcy
protection with significantly less debt.
A court hearing on the amended reorganisation plan will not
be held until after a February hearing on the validity of a
settlement with a U.S. unit's creditors. [ID:nN11141691]
(Additional reporting by Prashant Mehra and Janaki Krishnan;
Editing by Ranjit Gangadharan and Anshuman Daga)