Reliance Communications on Thursday said it has received $665 million from China Development Bank as the first instalment of a $1.93 billion loan to finance its third generation (3G) telecom services business.
"The drawn down amount will be used to refinance Reliance Communications' short-term rupee borrowings, resulting in substantial savings in its interest cost apart from extending its debt maturity profile," the company said in a statement.
The shares of the Anil Ambani Group company was the top gainer among the 30 shares that go into the basket of shares for the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE), up 3.50% at Rs.106.55.
The loan facility is fully underwritten by the Chinese bank and represents the first and largest-ever syndicated loan not only in India's telecom sector, but also in terms of a loan to an Indian entity from a Chinese financial institution, the statement added.
It includes a loan agreement for $1.33 billion to re-finance the 3G spectrum fee payment by the operator and $600 million for financing imports, as also for domestic expenditure on telecom equipment sourced from the Chinese vendors namely, Huawei and ZTE.