RCom shares surge post debt clearance

The company had availed the two loans in 2007 from a group of international banks

Reliance Communications (RCom) on Monday said it had completed full repayment of two syndicated external commercial borrowing (ECB) loan of  $500 million each, amounting to $1 billion (about Rs 6,000 crore), during the quarter ended June 30.

The company availed the two loans in 2007 from a group of international banks, and has repayments have been from RCom’s rupee resources, the company said in a statement. In October 2007, the Government had given approval to RCom for dual technology usage allowing them to offer GSM services along with CDMA. So, part of the borrowing could have been used towards payment of spectrum fee.

The Anil Ambani-led company has also said that it has reduced its foreign currency debt and the interest outgo on forex debt is fully covered by US dollar denominated earnings from the Reliance Globalcom business. RCOM has also made scheduled repayments of another $207 million foreign currency loan.  After the announcement, the company’s stock has jumped 12.19 per cent to close at Rs 132.50 on the Bombay Stock Exchange (BSE) on Monday.

Meanwhile, the stock has touched its 52-week high at Rs 133.25 on the BSE during the day. RCom’s market cap has also increased by Rs 2,972 crore to Rs 27,348 crore on Monday.