Reliance Jio to raise $750m via offshore loan, Telecom News, ET Telecom

Mumbai | KOLKATA: Reliance Jio is raising about $750 million (about Rs 5,700 crore) through an offshore syndicated loan to primarily fund future investment needs, two people with direct knowledge of the matter have told ET.

Companies like Bank of America, Credit Agricole, HSBC, State Bank of India and three Japanese banks – MUFG, Mizuho and SMBC – are expected to syndicate the five-year offshore loan which will likely be priced after adding 120 to 130 basis points versus the Secured Overnight Funding Rate (SOFR) – a new global rate indicator, market sources told ET. Individual banks could not be contacted immediately.

“The loan agreement could be signed this week,” said one of the people quoted above.
Jio, a unit of Mukesh Ambani-owned Reliance Industries, is likely to sign a deal with its potential lenders this week, he added.

Jio, led by Mukesh Ambani, did not respond to ET’s email as of press time Monday.

Earlier in January, Jio had raised around Rs 8,000 crore by selling corporate bonds in local money markets to mostly settle some of the arrears related to spectrum purchases in the 2014 and 2015 auctions, ET reported.

Bankers aware of the development said Jio’s latest fundraising via an offshore loan will also underscore global investors’ confidence in India’s telecoms market leader, regardless of troubled geopolitics in the wake of Russia’s invasion of India. ‘Ukraine.

Industry insiders say some of the proceeds from Jio’s latest fundraising could be used for capital expenditures toward the first wave of 5G network rollouts, especially in urban markets.

Jio may also use some of the loan proceeds to refinance certain short-term bridge loans previously taken out through commercial paper, another person with direct knowledge said. Some of them expire in June.

The government has persuaded the regulator to send its 5G spectrum pricing recommendations by the end of March for it to stage the sale in May. The government wants initial 5G rollouts by August 15.

Jio is expected to be the biggest participant in the upcoming 5G spectrum sale. But before that, Jio is also bolstering its 4G network to avoid a tough market challenge from rival Bharti Airtel, as well as loss-making Vodafone Idea, which is trying to regain lost ground after a government relief package.

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