Reliance Communications pays $1 billion debt early to reduce costs

Reliance Communications Ltd., India’s second-largest mobile-phone operator, has paid about 50 billion rupees ($1 billion) of debt ahead schedule to cut interest costs. The rupee-denominated term loans were paid three years before schedule to Indian and foreign banks.

The early payment will help Reliance Communications, controlled by billionaire Anil Ambani, save 7.5 billion rupees on an annualized basis. The company earlier this year had repurchase debt as prices of securities fell amid the global financial crisis.

Reliance Communications paid the money after completing the installation of its cell-phone network, based on the global system for mobile communications standard. Now, given that the GSM is rolled out, it’s likely that capacity expenditure isn’t going to be significant here on and Capex might have peaked.

Reliance Infratel to raise $1 billion in IPO: Further Reliance Infratel Ltd., the tower unit of India’s second-largest mobile-phone company, plans to raise 50 billion rupees ($1 billion) from an initial share sale. The company will file a draft prospectus to India’s market regulator in a week, according to sources.