RCom gets Rs 1,780 cr from China Development Bank

Posted By: Religare
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RCom gets Rs 1,780 cr from China Development Bank
Reliance Communication, a firm under Anil Ambani group declared that it has successfully drawn a second tranche of Rs 1,780 crore ($400 million) from China Development Bank.

The amount was drawn from the total amount of Rs. 8,700 crore ($1.93 billion) loan facility that was signed with China Development Bank (CDB) on March 9, 2011. Reliance communication intends to use the loan to refinance the 3G spectrum fees.

The declaration of the above was given by RCom in a filing to the Bombay Stock Exchange. Rs 6,000 crore ($1.33 billion) out of the facility include refinancing 3G spectrum fee payments by RCom, however, the remaining 2,700 crore ($600 million) are for equipments that are to be imported from Chinese vendors.

RCom further clarified that besides extending RCom's debt maturity profile, it would be using the drawn amount to refinance RCom's short-term rupee borrowings. This would further lead in substantial savings in its interest cost.

The loan facility that is drawn by the RCom is funded by a syndicate of Chinese banks or financial institutions, including CDB and is fully underwritten by CDB.

RCom further added that the entire process is first of its kind as it"s the largest ever syndicated loan that is taking place for refinancing spectrum fees by any telecom company. RCom drew the first tranche of Rs 3,000 crore ($665 million) on March 17, 2011.

After the second tranche, RCom had drawn a total of Rs 4,780 crore ($1.06 billion) toward refinancing of 3G spectrum fees. The third and last tranche is expected take place soon.

Read more about: rcom, telecom, bse, nse
Story first published: Friday, May 13, 2011, 12:32 [IST]
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