RCom raises $ 255 million to refinance 3G spectrum fee

Anil Ambani-led Reliance Communications said it has raised $255 million (about Rs 1,155 crore) by way of external commercial borrowing to partly refinance payment made for acquiring 3G spectrum.

The loan is funded by a consortium of banks led by Australian and New Zealand Banking Group Ltd, BNP Paribas, Credit Agricole Corporate and Investment Bank, DBS Bank Ltd and Intesa Sanpaolo Spa, RCom said in a filing to the Bombay Stock Exchange.

With this facility, the company will benefit from extension of maturity and substantial savings in interest cost, the filing added.

In December last year, RCom had also entered into a pact with China Development Bank Corporations for a loan of $ 1.33 billion (about Rs 6,000 crore) which will be used to refinance third-generation, or 3G spectrum fee and for purchase of telecom equipment.

The company's memorandum of understanding with CDB covers the syndicated loan of $ 1.33 billion for refinancing 3G spectrum fee and financing up to $ 600 million towards 85 per cent of the equipment and services to be procured from Chinese vendors Huawei Technologies and ZTE Corporation.

The company had won 3G licences for 13 key telecom circles, including that for key metros of Delhi, Mumbai and Kolkata, during the spectrum auction held last year.

Other circles for which it holds 3G licences are Punjab, Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, North East, Jammu & Kashmir, Orissa and Assam.

RCom had paid Rs 8,585.04 crore (Rs 85.85 billion) to the government towards securing the 3G spectrum.

Recently, the company has launched the 3G services starting with Delhi, Mumbai, Kolkata and Chandigarh, but on December 21, the Indian government had asked the leading telecom operators including Tata Teleservices and RCom to halt the launch of their 3G mobile phone services amid issues relating to security and interception facilities.

But the government has allowed the operators to offer 3G mobile services including video calls subject to an undertaking to be given by the service providers that they would install the interception facilities within six months.

Shares of RCom were trading at Rs 131.30, down 0.38 per cent in the late afternoon trade on BSE.