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RCom raises $150 Million from EDC for GSM launch
By siliconindia
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Thursday, 04 December 2008, 15:53 IST
Mumbai: To ensure a smooth launch of its GSM service, Dhirubhai Ambani founded Reliance Communication (RCom), has reportedly obtained $150 million (
757 crore) from Ottawa based Export Development Canada (EDC). The finance include a combination of loans and credit lines with a longer repayment tenure.
The raised amount shall facilitate the company to buy technology and equipment from Canadian suppliers, for launch of its GSM service by the end of the fiscal. This flagship company of the Reliance Anil Dhirubhai Ambani Group, which is worth $14 billion, has received the funding in addition to the $250 million provided by EDC earlier this year. The loan is provided at the London inter bank offered rate, or Libor, plus 100-150 basis points, which has to be repaid within seven years.
As reported by Mint, "Overall, the loan amount is very small for RCom,s capex (capital expenditure) requirement, but these kind of loans over time will diversify debt sources and lower credit risks," said Rajesh Zawar, Sector Analyst with Mumbai-based Antique Broking. Infact, other analysts have pointed that these loans will leave some cash with the company to clear its foreign currency convertible bonds (FCCB).
757 crore) from Ottawa based Export Development Canada (EDC). The finance include a combination of loans and credit lines with a longer repayment tenure.
The raised amount shall facilitate the company to buy technology and equipment from Canadian suppliers, for launch of its GSM service by the end of the fiscal. This flagship company of the Reliance Anil Dhirubhai Ambani Group, which is worth $14 billion, has received the funding in addition to the $250 million provided by EDC earlier this year. The loan is provided at the London inter bank offered rate, or Libor, plus 100-150 basis points, which has to be repaid within seven years.
As reported by Mint, "Overall, the loan amount is very small for RCom,s capex (capital expenditure) requirement, but these kind of loans over time will diversify debt sources and lower credit risks," said Rajesh Zawar, Sector Analyst with Mumbai-based Antique Broking. Infact, other analysts have pointed that these loans will leave some cash with the company to clear its foreign currency convertible bonds (FCCB).