Reliance Communications (RCom) has received approval from the Reserve Bank of India (RBI) for refinancing a Rs5,825-crore loan from a consortium of chinese banks to refinance its foreign currency convertible bonds (FCCB), which are maturing on 1 March 2012.
This is the largest FCCB refinancing in Indian corporate history, the Anil Dhirubhai Ambani firm said in a statement.
In January RCom said a consortium of Chinese state banks including Industrial and Commercial Bank of China, China Development Bank Corp, Export Import Bank of China and other banks have agreed to lend $1.18 billion to repay overseas convertible bonds (See: Reliance Communications raises $1.18 billion from Chinese banks to redeem FCCBs).
The loan has an "attractive" interest cost of about 5 per cent and 7-year maturity, RCom had said.
More than two dozen companies in the BSE-500 index face redemptions on foreign currency convertible bonds worth a combined Rs33,000 crore rupees by end-March 2013, according to a research note by brokerage Edelweiss Securities.
This is the second time that Anil Ambani company is tapping Chinese banks. Last year, China Development Bank arranged a $3-billion syndicated loan for the mobile firm and Reliance Power, also part of Anil Ambani's Reliance Group.