Reliance Communications’ (RCom) stock zoomed in today’s trade, going up as much as 10.3 per cent on rumours that it might have finalised a buyer for its telecom tower business.
Unconfirmed television reports said American Tower Corporation had emerged the highest bidder for RCom’s tower business, on the block since last June. The stock closed at Rs 99.3 per share on the Bombay Stock Exchange, 9.3 per cent higher than yesterday’s close. “The stock has come down sharply in the last two months, so some technical factors might have also influenced its run,” said Jagannadham Thunuguntla, strategist and head of research at SMC Global Securities.
RCom’s stock had been correcting for a long time, as investors had huge concerns on the company’s operational performance, as well as huge debt on its balance sheet. At the end of the third quarter, the debt was around Rs 32,000 crore.
Finalises Rs 8,700-cr loan
RCom today completed the procedure for obtaining a Rs 8,700-crore loan from the China Development Bank. It will be used to refinance RCom’s 3G spectrum fee and imports of telecom equipment. The loan facility is fully underwritten by CDB and will be funded by a syndicate.
Rcom had a debt of Rs 32,000 crore as on December 2010. It benefits from an extended loan maturity of 10 years and substantial interest cost savings.
RCom had earlier received an in-principle approval for this loan and signed a memorandum of understanding.
Last year, in the 3G spectrum auction, RCom had won bids to provide the service in 13 telecom circles, including Delhi and Mumbai. It paid Rs 8,585 crore to the government for acquiring the spectrum.
