Friday, August 10, 2012

Reliance Communications approaches SBI for Rs 4,000 crore loan package

Anil Ambani’s Reliance Communications has approached State Bank of India to restructure short-term borrowings worth Rs. 3000 crores after the company was forced to withdraw an initial public offering (IPO) for its undersea cable unit in Singapore due to weak market conditions.
Reliance Communications has sought to convert short-term borrowings with a maturity of 3-6 months into long term debt with a tenor of 3-5 years, according to three people directly briefed on the matter.
Reliance Communications may also seek fresh loans worth Rs 1,000 crore to meet its capex requirements for FY 13, according to one of the people quoted above. Reliance Communications said in an investor concall last quarter that the company would generate substantial cash flows to meet its capex requirements for the current fiscal and would not need to raise fresh borrowings.
Reliance Communications did not respond to email queries from ET NOW. State Bank of India could not be reached for comment, though two senior SBI executives confirmed they had been approached by RComm to restructure loans.
Reliance Communications was hoping to raise close to $1 billion through an IPO of its undersea cable unit, Flag Telecom. The IPO which was launched last month in Singapore failed to attract investors forcing the company to withdraw the issue.
Reliance Communications has a net debt of close to Rs. 36,000 crore as of 31st March 2012, which is more than five times its earnings, making it the most leveraged company in the Indian telecom sector. The company has been exploring various options including asset
sales to reduce its debt burden.


Post a Comment