RCom to raise $1 bn against deal with Jio

Anil Ambani's Reliance Communications (RCom) said on 13 November it would raise $1 billion (Rs 6,360 crore) by securitising its Rs 12,000-crore deal with Mukesh Ambani's Reliance Jio, in the next six months. This means, the Anil Ambani company would be able to raise money immediately by giving a guarantee of its earnings from the telecom tower sharing deal with elder brother Mukesh Ambani's telecom venture.

The payment by Jio to RCom is spread across 15 years. If RCom securitises this amount, it can raise funds from institutions, which will be paid over time by Reliance Jio. The amount raised through securitisation will go towards reducing RCom's mounting debt.

By the end of the second quarter, it swelled to Rs 41,000 crore owing to the forex impact of depreciating rupee. The forex impact accounts to Rs 3,800 crore.

"We will look at securitising in the next six months, which will reduce our debt by a factor of one. The terms are under negotiation," Gurdeep Singh, President (wireless business) at Reliance Communications said.

According to the deal between the companies, RCom will share its 45,000-odd telecom towers across the country for Jio's yet-to-be launched 4G venture. Reliance Jio is the only service provider with a pan-India licence to offer high-speed data services through Worldwide Interoperability for Microwave Access (WIMAX) spectrum. "The handover of tower assets has already started and will be completed by the end of the financial year," said Singh


Source:  http://cablequest.org/news/telecom-news/item/3552-rcom-to-raise-$1-bn-against-deal-with-jio.htmlSource: http://cablequest.org/news/telecom-news/item/3552-rcom-to-raise-$1-bn-against-deal-with-jio.html