Reliance Infocomm, an Anil Ambani group company, is likely to clinch next week a $300 million foreign loan to repay previous high cost debts.
The mobile operator will sign the agreement for this loan by January 15. Thirty global banks have been involved in arranging the loan spread over 5-7 years, banking sources said. When contacted, Reliance Infocomm officials declined to comment.
The entire $300 million syndicated foreign currency loan is likely to bear an interest rate of less than Libor+100 basis points.
The proposed loan will be used to repay the company's earlier $300 million dollar loan, which was raised at a higher rate of Libor plus 200 basis point, sources said, adding this will directly result in a saving of 100 basis points above Libor, which in turn will go a long way in improving the bottlomline and profitability of the company.
The lead arranger for the proposed loan would be Citibank, ABN Amro, HSBC, Standard Chartered Bank, BNP Paribas, DBS, ING and Calyon.
The offer has received fantastic response from the bankers and 30 banks from countries like Japan, Taiwan, China, Indonesia, Bank of Sumitomo, China Trust Bank, Rabobank and KfW participated in raising the loan, among others.
Investment banking sources said considering that it is just a $300 million loan, the wide participation of banks in its shows the credibility of the company in the global financial market.
With the competitive rate at which the company has been able to raise this amount, sources said such rates were only offered to AAA rated corporates.
The old $300 million syndicated loan was 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.
Reliance Infocomm, which offers CDMA-based mobile services, has pan-India presence and has 1.3 crore (13 million) subscribers. As a Unified Access Service provider, it also operates fixed line and fixed wireless services.
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