Jio plans to refinance $1.5-bn debt from overseas lenders

MUMBAI: Reliance Jio Infocomm Ltd, the telecom arm of billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL), is looking to refinance as much as $1.5 billion of debt from overseas lenders, according to two people directly aware of the company’s plans.

“There are two bank facilities of $1 billion and $500 million each with tenors of 5.5 and 7 years, respectively,” said one of the two people cited above, requesting anonymity. “The company is in the midst of investor road shows which are being held in Tokyo, Taiwan and Singapore.”

This is part of the refinancing of $2.5 billion of RIL’s older bank facilities, the second person said, also requesting anonymity.

“The original loan of $1.5 billion was part of debt raised to buy broadband spectrum. The debt was to mature in 2015 but was rolled over,” the person said.

Both facilities, guaranteed by RIL, were underwritten by a consortium of 15 foreign banks. While the pricing of the loans this time was not immediately known, RIL has raised loans at around 160 basis points above Libor (London interbank offered rate), an international benchmark rate. One basis point is onehundredth of a percentage point.

In 2010, Reliance Industries had bought Infotel Broadband Services for $1 billion, marking its re-entry of into the telecom business. Infotel Broadband Services was then the only firm to win broadband spectrum in all 22 zones in India paying ₹12,848 crore ($2.7 billion) for the spectrum, Mint had reported. Confirming the development to Mint, a RIL spokesperson said “Reliance Jio Infocomm is in the midst of successfully refinancing $1.5 billion of syndicated commercial loans taken from a group of international lenders at a cost lower than the existing loans whilst also achieving extension of maturities of the said original loans.

“The loan is under syndication and the said process is expected to be closed in the next four weeks. In addition, a $1 billion loan in RIL is also being refinanced under similar timelines. The said exercise is part of the ongoing liability management exercise which the group regularly undertakes,” the RIL spokesperson said in response to a query.

In August, Bloomberg reported that RIL plans to refinance a significant portion of its close to $12 billion of borrowings.