Reliance Communications is all set to secure a $1.93-billion long-term loan from China Development Bank for a 10-year period. Out of total proceeds $ 1.3 billion will be used to refinance the loan taken for buying 3G spectrum and the balance will be utilised to buy telecom network equipment from Chinese vendors Huawei and ZTE. RCom is expected to sign a memorandum of understanding with the Chinese bank on Wednesday.
In May 2010, the country’s second-largest telecom operator by subscribers had paid 8,585 crore for 3G spectrum. The operator, with a debt burden of about 30,000 crore at present, had taken a 12-month loan from domestic lenders at interest rates of 8-10% for buying 3G airwaves. The loan from Chinese Development Bank is expected to result in interest savings of around Rs 500 crore a year for RCom.crackcrack
