Reliance Infocomm ties up financing of $2.2 billion

Monday, 27 December 2004, 08:00 Hrs
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MUMBAI: Reliance Infocomm, one of India's largest telecom firms, said the company had completed the debt financing of $2.2 billion with the signing of a pact to raise $750 million for financing telecom projects.

The latest round of financing consists of $500 million of the Export Import Bank of the US and $250 million of Export Development Canada (EDC) loans, said a statement issued by Reliance Infocomm, a business unit of Reliance Industries.

The loan has a total repayment tenor of 10 years after a one and a half year build out period of the telecom network, said the statement adding that the move marks the closure of its total debt financing of $2.2 billion.

The debt will finance the expansion of Reliance Infocomm's mobile network to over 5,000 towns and cities,

"This deal provides the company extremely attractive long tenor funding," said Jagannatha Kumar, head (project finance) of Reliance Infocomm. "The deal is an endorsement of our business plan and a recognition by international agencies of the company's achievements."

Reliance Infocomm has over nine million mobile telephone customers.

The financing of $500 million by the Export Import Bank of the US is the largest for any infrastructure project in India. The Export Import Bank of the US had $967 million in exposure in India prior to this transaction in various sectors.

Export Development Canada provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates on commercial principles.

The EDC facility of $250 million extended to Reliance Infocomm is the largest private sector transaction that it has done in India to date.

Reliance Infocomm has been in news recently after Mukesh Ambani, chairman of its parent company Reliance Industries, decided to renounce his controversial stake in the telecom firm.

Source: IANS
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