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India's largest telecom Jio Communications is reportedly looking to raise funds to the tune of $2.5 billion in foreign loans.
Jio is reported to be in talks with major banks like Bank of America, BNP, HSBC & Societe Generale to raise $2.5 billion (or Rs 20,600 crores) through an offshore syndicated loan. The telecom is reportedly doing so to fund the purchase of 5G gear from Ericsson and Nokia. The process will soon be finalized as the telecom has already launched its 5G services in a few cities with plans to cover the whole of India by December 2023.
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The overseas loan is expected to be priced 65 bps over the Secured Overnight Financing Rate (SOFR). Moreover, two export-credit agencies: EKN & Finnvera, will (reportedly) be issuing guarantees for the loan. There is a chance the loan could be upsized as more banks join. The loan is anticipated to be tenured between 3-7 years.
On the other hand, Reliance Industries, the parent company of Jio Communications and several other companies under the conglomerate, is also looking to raise around $1.5 billion (or Rs 12,400 crores).
The company is reportedly in talks with Barclays, HSBC, Bank of America, Citigroup, Credit Agricole, DBS Bank, Mizuho Bank, and MUFG Bank to raise the loans via external commercial borrowing (ECB). These funds are reportedly being raised to support the group's ambitious Rs 75,000 crore CAPEX plans. The loan, which is estimated to be tenured for 5 years, will be priced 130-150 bps above the SOFR.
Jio Communications is an unlisted company currently with IPO plans currently on the table. The stock of Reliance Industries closed at Rs 2,405.80 per share, down 1.09%.
Article by Aman Agarwal.
This news piece is brought to you in association with Jobaaj.com
