Anil Ambani group firm Reliance Communications on Wednesday said it has completed the procedure for obtaining Rs. 8,700 crore loan from China Development Bank to finance the cost of 3G spectrum and equipment purchase.
“China Development Bank (CDB) has signed the final documentation for fully underwritten over Rs. 8,700 crore (USD 1.93 billion) loan facility for Reliance Communications,” RCom said in a statement.
Terming the loan to be the largest in the history of telecom sector, the company said it will use the proceeds of the loan for refinancing RCom’s 3G spectrum fee and imports of telecom equipment.
The loan facility is fully underwritten by China Development Bank, and will be funded by syndicate of Chinese Bank/Financial Institutions including the bank, the release added.
RCom, which has a debt of over Rs 32,000 crore as on December 2010, benefits from extended loan maturity of 10 years and substantial interest cost savings.
RCom had earlier received an in-principle approval from China Development Bank for theses facilities, and had executed memorandum of understanding with the bank.
Earlier in May, Reliance Communications had won 13 key telecom circles during the 3G auction, including the key metros of Delhi, Mumbai and Kolkata.
It holds 3G licences in the telecom circles of Delhi, Mumbai, Kolkata, Punjab, Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, North East, J&K, Orissa and Assam.
Reliance Communications had paid Rs. 8,585.04 crore to the government towards securing the 3G spectrum.
Shares of RCom closed higher by 9.36 per cent at Rs 99.30 on the Bombay Stock Exchange.
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