Mumbai, Jan. 4: Reliance Industries sold another big chunk of treasury stock today — 2.59 crore shares this time — triggering speculation in the market that it could sweeten its bid for the troubled Dutch chemicals giant LyondellBasell (LB), which is struggling to come out of bankruptcy protection in the US.

The shares were sold to the Life Insurance Corporation through a block deal at an average price of Rs 1,035 per share. The state-owned insurer’s stake in Reliance has gone up from a little over 6 per cent to 6.8 per cent.

The stake sale will raise Rs 2,675 crore, swelling RIL’s bulging cash chest to well over Rs 25,000 crore (more than $5.3 billion) that many expect will be used to fund acquisitions worldwide.

This is RIL’s second sale of treasury stock in four months.

“The financial impact (of this transaction) will be reflected in the consolidated financial statements of the company,” Reliance said in a terse statement to the bourses.

Analysts said the move would definitely send out a signal to LyondellBasell’s existing management and lenders — who have already submitted a reorganisation plan to a US bankruptcy court — that the Indian petrochemicals major remained keen to pursue its non-binding bid for LB.

So far, Reliance’s bid for LyondellBasell has faced opposition from LB’s management and creditors Access Industries, Ares Management and Apollo Management LP that are keen to revive the bankrupt company by converting $18 billion of debt into equity.

Reports indicate that the unsecured lenders of LB have insisted that bids from other suitors, including Reliance, should also be justly considered and evaluated.

There has also been talk of RIL’s offer, especially the cash component, being “far too low”. Reliance, on its part, will be interested in picking up assets that are priced cheaper .

“It may also indicate that Reliance is prepared to pay more for LyondellBasell compared to what is on offer right now,” said an analyst.

Global and local analysts have estimated in the past that Reliance was willing to pay roughly $12 billion for the Dutch petrochemicals major, which has operations in North America.

RIL last sold treasury stock of 1.5 crore shares that netted it approximately Rs 3,188 crore on September 17. The first sale of treasury stock was done before India’s largest private sector company issued bonus shares in the ratio of 1:1.

The treasury stock was created in 2002 when the company effected a merger with Reliance Petroleum Ltd. The latter had set up the first crude oil refinery at Jamnagar in Gujarat.

RIL’s shares fell 1.3 per cent to Rs 1,075.35 on the Bombay Stock Exchange today.

KG basin

Reliance proposes to invest an additional $1.5 billion in bringing to production four gas discoveries adjoining its gasfields in the Krishna-Godavari basin on the east coast.

In July 2008, RIL had proposed to develop nine satellite discoveries in the KG basin block for $5.91 billion, but later narrowed it down to four finds that could be put to production in the next 4-5 years.