Anil raises $2 billion from Citi, Stanchart for Hutch buy
Investment banking sources saiys that that the $2 billion transaction would be completed in February, reports Indulal PM.india Updated: Jan 23, 2007 20:22 IST
With only a few days left for placing the final bid to take over India's fourth largest telecom company, Hutchison Essar, Anil Ambani has been quietly raising funds to finance the proposed transaction.
Anil Ambani, who has been authorised by the Reliance Communications Ltd (RCL) board to mop up resources for the Hutch acquisition, is understood to have struck a deal with Citi Bank and Stanchart to raise $2 billion (8852 crore). RCL has also secured government approval to sell as much as $1.2 billion of securities overseas on Tuesday.
Investment banking sources said that that the $2 billion transaction would be completed in February. Though sources from both the banks confirmed the development, it could not be independently verified whether the money raised will be used to fund the multi-billion Hutch-Essar acquisition.
An ADAG spokesperson declined to comment. However, analysts tracking RCL said that fund would be used for the Hutch.
RCL board has approved a proposal to raise $1 billion through a foreign currency convertible bonds issue which has been approved by its board two weeks ago.
Anil Ambani is also in negotiations with global private equity funds like Blackstone and Carlyle to fund the Hutch transaction which is being valued by the bankers at $ 15-16 billion.
ABN Amro Holding, Barclays and Deutsche Bank are also helping the company to raise funds.
The acquisition of Hutch is crucial for RCL as it helps in raising its market share in India's cellular market to more than 35 per cent. The agreement would combine RCL's CDMA-based operations with Hutch's GSM service in 16 of 23 telecommunication circles across the country.