Reliance Communications draws down $665 million of China Development Bank loan
17 Mar 2011
Reliance Communications Limited (Rcom) has drawn down the first tranche of $665 million (Rs3,000 crore) out of the $1.93 billion (Rs8,700 crore) long-term loan facility signed with China Development Bank (CDB) on 9 March 2011.
Of the $1.93 million loan, $1.33 billion (Rs6,000 crore) will be used for refinancing 3G spectrum fee payment by Rcom and $600 million (Rs2,700 crore) will be used for equipment imports from Chinese vendors.
Rcom will use the drawn down amount to refinance its short-term rupee borrowings, which will result in substantial savings in interest cost apart from extending Rcom's debt maturity profile, the company said.
The loan facility, which is fully underwritten by CDB, is being funded by a syndicate of Chinese banks / financial institutions, including CDB.
This represents the first and largest-ever syndicated loan for refinancing spectrum fees by any telecom company.
Rcom said it plans to draw down the remaining portion of the $1.93 loan soon.