Reliance Communications (RCom), the Indian mobile carrier owned by billionaire Anil Ambani, is looking to raise Rs6,500 crore (US$1.2bn) in loans from domestic banks, according to the Economic Times.
The State Bank of India, the country’s largest…
Reliance Communications (RCom), the Indian mobile carrier owned by billionaire Anil Ambani, is looking to raise Rs6,500 crore (US$1.2bn) in loans from domestic banks, according to the Economic Times.
The State Bank of India, the country’s largest bank, will lend about Rs1,650 crore (US$307m), according to a source cited in the report. RCom is currently in discussions with other banks to raise the remainder.
The loans, which will be repaid in seven years, will finance operating expenses, capex, and convert some short-term loans into long-term loans, said the source.
Tower arm in talks for lease deal and stake sale
Meanwhile Reliance Infratel, the towerco unit of RCom, is currently involved in a number of leasing deals, according to media reports.
The Economic Times reported that Reliance Industries, a company belonging to Anil’s brother, Mukesh Ambani, was looking to lease 50,000 towers for Rs8,500-10,000 crore (US$ 1.6-1.9bn) over a ten-year period and also to buy a stake in the towerco for Rs18,789-21,471 crore (US$3.5-4 bn).
Talks are ongoing for the two parts of the deal but a contract is expected to be signed next month, according to sources cited in the report.
Gurdeep Singh, CEO of RCom’s wireless business, told analysts on a conference call that Reliance Infratel is in advanced stages of discussions with three carriers for a large infrastructure deal, reported Reuters.
Singh said it was premature to comment on a potential leaseback deal when asked if the towerco would lease its towers to Reliance Industries at a discounted price.
As TelecomFinance has previously reported, RCom has been considering selling stakes in its subsidiaries for a while, in order to cut down its US$6.4bn debt load.
The cash-strapped group is currently in talks with buyers for Reliance Globalcom, its overseas cable arm, to raise funds, said the Economic Times.
Plans to float
Reliance Infratel is considering an IPO towards the end of the year, according to a source cited in the report. The towerco plans to offload a 25% stake, leaving RCom with 55%.
The possible IPO follows the success of towerco Bharti Infratel’s recent float, which was oversubscribed by 1.3 times, raising US$763m.
The Bharti listing showed that investor interest in India’s telecoms industry is picking up again, following the 2G auction scandal.
