The latest fundraising comes on top of a $2.5 billion (Rs 20,600 crore) offshore syndicated loan for which the telecommunications arm of Reliance Industries (RIL), owned by Mukesh Ambani, is in talks with overseas lenders , as ET reported on October 10. be used for purchases of 5G network equipment from Sweden’s Ericsson and Finland’s Nokia.
Sources said the $1.5 billion offshore loan could be fixed after adding 150 to 165 basis points to the Secured Overnight Funding Rate (SOFR), a global rate indicator that recently replaced the London interbank offered rate (LIBOR). “The company has called individual banks offering the fundraiser, as it aims to raise the money by mid-November,” said one of the people quoted above.
Bank of America, Credit Agricole, DBS Bank and Societe Generale are among others in talks with the company on the ECB, another person said.
In July, RBI doubled the fundraising limit via ECBs to $1.5bn under the automatic route, in hopes that foreign inflows could cushion the rupiah’s fall against the dollar. . The easing of the regulations is effective until the end of the 2022 calendar.
Discussions on the two loans are happening “simultaneously”, said an executive involved in the exercise.
The $2.5 billion loan could have a term of five years and is expected to be fixed after adding 130 to 150 basis points to SOFR, one of the people said.
Jio and the banks named above did not comment on this.
The acceleration of Jio’s 5G network capital expenditure is due to government pressure to accelerate the adoption of next-generation wireless broadband service in India. The telco is investing Rs 2 lakh crore (including spectrum costs) to set up its pan-India 5G network. In the auction concluded in August, he spent Rs 88,078 crore on 5G.
Earlier this month, Jio launched its 5G beta services in four cities, aiming to provide nationwide coverage by December 2023.
Separately, parent company RIL has also engaged with foreign lenders to raise funds via BCEs to support its investment plan, which ET also announced on October 10. It is in talks with lenders including Barclays, MUFG Bank, Citigroup and Mizuho Bank, among others.
Shares of RIL closed at Rs 2,371, down 0.54%, on BSE on Friday.