Reliance Jio Infocomm is planning to raise about $1.5 billion via global lenders, as per a latest report in the Economic Times. The company is reportedly in talks with several global players to raise this additional money via external commercial borrowings. The primary purpose of this funding has been mentioned that the company wants to fund its 5G capex, as per the report.
With regards to this funding, Reliance Jio Infocomm has also reportedly reached out to foreign banks like BNP Paribas, HSBC and MUFG Bank. The ET report cites people familiar with the matter and mentions that India’s telecom market is seeking mop-up fiver-year money via the ECB route, with Reserve Bank of India (RBI) relaxing some norms.
These plans of additional fundraising by Reliance Jio are in addition to a $2.5 billion offshore syndicated loan. For the latter, the Mukesh Ambani-owned Reliance Industries Limited is already in talks with some overseas lenders and is expected to be used for 5G network gear purchases, as per the report.
People familiar with the matter also reportedly mentioned that the $1.5 billion offshore loan is likely to be priced after adding 150-165 basis points over the Secured Overnight Financing Rate (SOFR). The SOFR is now considered to be a global rate gauge benchmark which has also replaced the London Interbank Offered Rate (LIBOR).
Meanwhile, an executive also mentioned to The Economic Times that talks over both loans are going on simultaneously.
Additionally, another person familiar with the matter mentioned that the $2.5 billion loan is likely to be of a five-year tenor and may be priced after adding 130-150 basis points over SOFR. However, Outlook could not independently verify any of the details and more would be know only after the company comments on the same.
