23 May 2012
LATEST NEWS:
Lat Am businesses booming as Europe lags behind for international operators 100G technology makes its debut in Central America Free conference calling now available in Israel Internet-free mobile Facebook, email and online chat apps platform launches... Indian telco giant taking steps into Brazil Green power solutions provider spreads into South Asia Cable agreement to bolster international connectivity in Iraq Lat Am giant looks to Netherlands to boost European footprint CSP unifying mediation systems across four Central American countries Thai operator secures wireless distribution agreement Financial services project reaching out to millions of Africans Fibre investment on the way in Algeria Android tablets gaining popularity in Southeast Asia Bharti seeking JV takeover as profits slide How an Alternative Approach to SIM Card Provisioning Helps Operators Cure t... Solar-powered learning initiative takes off in Uganda GSMA voices criticism of Indian licensing proposals Enhanced mobile broadband deploying across three Baltic countries Market developments lay the foundation for future growth in Iraq India Feels More Shockwaves from the So-called ‘2G Scandal' Overpriced broadband faces fibre challenge in Angola First commercial 4G services go live in Croatia VimpelCom sells Vietnamese assets TRAI advocates new operators entering 2G auctions Romania’s first MVNE launching imminently Indian tax change could provoke legal action from Vodafone Mobile growth slows in Iran as penetration reaches saturation point Thailand close to finalising 3G auction process Internet Exchange Points Spur Internet Growth in Emerging Markets Incoming fibre boosts investment prospects for Burundi 3G on the way in Djibouti, but competition is required Fibre, not privatisation, could be the answer for Africa’s fixed-line opera... Saudi incumbent looks abroad amidst heated domestic competition

RCom receives loan from Chinese banks

Attention: open in a new window. PDFPrint

Three Chinese banks have come to the rescue of the debt-ridden Indian operator Reliance Communications (RCom). The operator has received financing of around US$1.2 billion from the triumvirate in order to make a repayment for a convertible bond due in March.

The three banks providing the loan are the Industrial and Commercial Bank of China Ltd (ICBC), Development Bank Corporation (CDB) and Export Import Bank of China (EXIM). The loan has an interest rate of roughly 5% and a maturity period of seven years. It has been described by RCom as "the largest refinancing in the history of Foreign Currency Convertible Bonds (FCCBs)" by an Indian company.

The refinancing operation has averted a potential default for RCom. The operator originally intended to convert its loan into stock once it had matured, but RCom’s share prices have plummeted since the loan was first issued in 2007 – a time at which India’s stock market was flourishing. Almost the entire amount is now due to be repaid.

The loan from the three Chinese banks has allowed RCom to avert a potential default. The terms of the loan are considered highly favourable, with one banking source saying: “At a time in which liquidity is tight in India this is an extremely good deal for Reliance, and not the sort of deal they could have found elsewhere.”

It has been suggested that RCom was able to negotiate such favourable terms due to existing relationships with certain Chinese vendors commissioned to provide equipment for the operator’s 3G network.


Add this page to your favorite Social Bookmarking websites
Digg! Reddit! Del.icio.us! Google! Live! Facebook! Technorati! StumbleUpon! Yahoo! LinkedIn! TwitThis Baidu
Readers Comments (0)

HAVE YOUR SAY


You must sign-in to make a comment.


reg_button    reg_button


 

Newsletter

Sign up for Developing Telecoms FREE monthly e-newsletter and keep up-to-date with all the latest news, analysis and postings on the site.

Click here to sign up

Why sign up? Click here