In one of the largest deals by an Indian telecom company, Reliance Infocomm has raised $300 million from overseas markets through syndicated loans to part-finance its $5.5 billion telecom project.
The seven-year loan carrying an interest rate of 1.7 per cent over the London Interbank Offered Rate (LIBOR), considered to be one of the benchmark rates, is structured in such a way that it comes down to 1.2 per cent over LIBOR during the tenure, Jagannath Kumar, head, project finance, Reliance Infocomm, said.
The $300 million syndicated loan has been arranged by a consortium of eight banks -- ABN Amro NV, Australia and New Zealand Banking Group, Bank of Baroda, BNP Paribas, DBS Bank, ICICI Bank, Mashreqbank and Rabobank.
The deal was signed by Reliance Infocomm and the consortium members recently in Mumbai.
The company which has a subscriber base of 8.5 million, has already raised domestic debts of Rs 5,000 crore (Rs 50 billion), and some equity towards capital expenditure for the ongoing mega $5.5 billion project in Mumbai.
"The transaction, the first ever cross-border borrowing by Reliance Infocomm, and the largest debt raising in the international syndication market by an Indian telecom company, has received an overwhelming response," Kumar said.
The deal is a sign of the faith reposed by the global banking community in the operating and financial strengths of Reliance Infocomm, in its second year of operation, Kumar said.
Last week, Reliance Industries Chairman Mukesh Ambani told an investor meet in New York that Reliance Infocomm may go public next year. Reliance Industries holds 45 per cent stake in Reliance Infocomm.
The sale of shares in Reliance Infocomm will be "as soon as we have finished the roll-out of our broadband Internet services," Ambani had said, adding that Reliance Infocomm should announce its initial public offer some time in late 2005 or early 2006.
Reliance Infocomm, which has emerged as India's largest mobile phone company, is adding nearly 4,000 cities and towns to its mobile network.
It has established a pan-India, high capacity, integrated (wireless and wire-line) and convergent (voice, data and video) digital network, to offer services spanning the entire infocomm value chain - infrastructure, services for enterprises and individuals, applications and consulting.
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