Billionaires: Mukesh Ambani’s Reliance Industries unit plans $500m offshore loan

In our round-up of the world’s ultra-wealthy, investor Bill Ackman kicks off fundraising for new US fund and Carlos Slim’s company invests $1.2 billion in Mexican gas field

A longer repayment period will potentially help Mukesh Ambani’s conglomerate to improve its cost competitiveness. Reuters

A unit of India’s largest company Reliance Industries is planning to borrow at least $500 million to refinance debt, in what could be the conglomerate’s first offshore loan this year.

It is in talks with a group of foreign banks for a loan with a tenure of 12-15 years, sources said, asking not to be identified as the discussions are private.

The funds would be raised for Ethane Crystal, a subsidiary of Reliance Ethane Holding, the group’s business of buying ships to transport ethane, they said.

In 2016, Reliance Ethane had raised $572 million with a 12-year tenor to purchase six new ethane carriers.

A longer repayment period will potentially help billionaire Mukesh Ambani’s conglomerate to improve its cost competitiveness.

The ethane business is one of the factors that contributed to its profitability in the March quarter.

The proposed fundraising comes as India’s ethane demand hit a record high this year. The country is seeking to boost its petrochemical capacity to keep pace with the growing consumption of plastics.

Reliance Industries operates one of the world's largest ethane transportation and cracker facility, which enables procurement of the gas from North America to its plant in Dahej, Gujarat.

In March, Reliance Ethane invested $102.9 million into three new subsidiaries, which plan to use the funds to make part payments for contracting three new ships.

The latest loan plan follows Reliance Industries’ record borrowing in foreign currency last year.

Bill Ackman, chief executive and portfolio manager at Pershing Square Capital Management, has built his reputation as an activist investor. Reuters

Bill Ackman

Hedge fund manager Bill Ackman kicked off fundraising for a new US-listed closed-end fund, an effort sources say could bring in as much as $20 billion, more than double his assets under management.

Last month, Mr Ackman sold 10 per cent of his firm, Pershing Square Capital Management, which posted mostly double-digit returns since 2019 after a spell of losses.

The new fund, Pershing Square USA, will offer lower fees for investors and quicker access to capital than traditional hedge funds, regulatory filings show.

There will be no management fee charged for the first year after the fund's initial public offering and no performance fees ever.

It will be listed on the New York Stock Exchange and open to anyone who can invest in the US, including pension funds, endowments and retail investors.

Roughly 80 per cent of the financing is expected to be raised by institutions, with retail investors making up the rest, a filing showed.

Mr Ackman, a heavy user of social media platform X, referenced the fundraising on July 9 when he messaged his 1.3 million followers: “I am going to be busy for the next few weeks. $PSUS!!”

Investors, including ones unable to write the multimillion-dollar cheques Wall Street hedge funds traditionally demand, can pay $50 a share for the new vehicle.

At the end of June, Pershing Square Capital Management oversaw $18.7 billion in assets, according to a company document.

This includes some $15 billion in assets in Pershing Square Holdings, the 10-year-old closed-end fund listed in Amsterdam and London.

Mr Ackman built his reputation as an activist investor with noisy campaigns at companies ranging from railway Canadian Pacific to payroll and tax services company ADP.

He owned stakes in Chipotle Mexican Grill, Hilton Worldwide Holdings and Restaurant Brands International at the end of the first quarter.

Mr Ackman's recent string of strong returns – Pershing Square Holdings earned 27 per cent last year, 27 per cent in 2021, 70 per cent in 2020 and 58 per cent in 2019 (it dropped 8.8 per cent in 2022 when the market tumbled) – followed a reorganisation of the firm.

Taking the advice he usually gives to companies to perform better personally, Mr Ackman re-engineered the way he invests and reversed double-digit losses in 2015 and 2016 and smaller declines in 2017 and 2018.

While most of Carlos Slim's $93.3 billion fortune comes from his telecommunications company, America Movil SAB, he has been investing in energy projects. Reuters

Carlos Slim

A company controlled by Mexico’s richest person, Carlos Slim, is investing $1.2 billion to develop a vast field in the Gulf of Mexico that is expected to produce gas by around 2026.

Mr Slim’s Grupo Carso agreed to a deal with Mexico’s state-run Petroleos Mexicanos to explore and extract from Lakach, a deepwater field discovered in 2007 about 98 kilometres south-east of the city of Veracruz.

Pemex will own the field and its reserves, while Grupo Carso will build an inland facility to store and process the gas and condensates.

It could serve as a potential model for how Mexico’s state oil company will work with private enterprises.

Under President Andres Manuel Lopez Obrador, whose term ends in September, the Mexican government has reasserted state control of the energy industry, but production and exploration have slowed with less private investment.

Last year, Pemex scrapped a similar agreement to develop Lakach with New Fortress Energy.

In December, Mr Lopez Obrador praised a Carso agreement to acquire stakes in two oilfields, “because it stays in the hands of Mexicans and I’m sure that they’re going to invest to extract crude”.

Mr Lopez Obrador’s successor, President-elect Claudia Sheinbaum, has said she will work with private investors in energy while insisting that Mexico’s natural resources belong to the people.

Carso will team with Houston-based Talos Energy and a local unit of Spain’s Fomento de Construcciones y Contratas to develop Lakach.

Mr Slim owns stakes in both companies. While most of his $93.3 billion fortune comes from his telecoms company, America Movil SAB, Mr Slim has been investing in energy projects such as the construction of offshore platforms for more than a decade.