Reliance Communications (RCom) on Wednesday signed a memorandum of understanding (MoU) with China Development Bank Corporation (CDB) for 10 year syndicated financing of Rs 9,000 crore ($1.93 billion). This is mainly to refinance the loan taken for buying 3G spectrum and also to buy telecom network equipment from Chinese vendors-Huawei and ZTE.
“The proposed facility has 10 year maturity, and will be funded by a syndicate including CDB and other Chinese Banks and financial institutions. Rcom will benefit extension of maturity, and substantial savings in interest costs,? said company in a media statement.
In May 2010, the company secured 3G licenses in 13 telecom circles for Rs 8,585 crore as fee for 3G spectrum.
Out of the $1.93 billion, $1.33 billion (about Rs 6000 crore) will be used to settle the short-term loans taken from Indian banks for buying 3G spectrum.
