In a positive move for the debt-laden telecom major , Reliance Communications (RCOM) has tied up with a clutch of Chinese banks to refinance the maturity value of its outstanding FCCBs (foreign currency convertible bonds) worth $1.18 billion. The development comes at a time when the Anil Ambani-led company has been hit hard due to heavy debts on its books and its alleged involvement in the multi-billion-dollar , second-generation (2G) spectrum allocation scam.
The refinancing for RCOM's outstanding FCCBs is being done by Industrial and Commercial Bank of China (ICBC), China Development Bank (CDB) and Export Import Bank of China (EXIM), among other Chinese banks, according to a statement from the company on Tuesday.
"This is the largest refinancing in the history of FCCBs by any Indian corporate . RCOM will benefit from extended loan maturity of seven years and an attractive interest cost of about 5%. The loan proceeds would be used for refinancing the entire redemption amount of FCCBs which are due for redemption on March 1, 2012," said the RCOM statement.