RCom inks $1.93 bn loan deal with Chinese bank

The debt-ridden Anil Dhirubhai Ambani Group (ADAG) company, Reliance Communication (RCom) today completed final documentation with China Development Bank (CDB) for Rs 6,000 crore ($1.33 billion) loan facility.

The facility is fully underwritten by CDB, and will be funded by a syndicate of Chinese banks/ financial institutions including CDB. This represents the fist and largest ever syndicated loan for refinancing spectrum fees, the company said in a filing to the stock exchanges.

RCom has also signed an additional agreement for credit worth Rs 2,700 crore ($600 million) with CDB, for financing imports and domestic expenditure of telecom equipment from Chinese vendors, namely Huawei and ZTE.

The company has already received the Reserve Bank of India (RBI) approval for the facilities and draw down is expected to commence shortly, the statement said.

The aggregate financing of Rs 8,700 crore ($1.93 billon) has a maturity period of 10 years, contributing significant chunk of the company's debt maturity profile, apart from substantial savings in interest costs.

The stock rallied 11% to touch Rs 100.20 during intraday trades and finally settled 9% higher at Rs 99.20 on the NSE. Around 34.42 million shares changed hands today on a combined basis, as against an average of 17.63 million shares traded daily in the past two weeks.