India’s leading telecommunications company is seeking to raise Rs 8,000 crore through corporate bonds. Reliance Jio Infocomm will sell corporate bonds in the local market next week to raise funds, The Economic Times reported. The corpus generated from the bonds will be used to repay dues the company accrued from buying spectrum in the 2014 and 2015 auctions, people with knowledge of the matter told ET.
The bonds are expected to have a term of five years and three years or two years, offering an interest rate of approximately 6.2% and 5.35%. Lenders like Axis Bank, ICICI Bank, HDFC Bank and State Bank of India are being considered by the company to raise Rs 5,000 crore via five-year bonds, while shorter bonds are offered to top mutual funds to acquire another Rs 3,000 crore.
While the Mukesh Ambani-owned company had settled its dues for spectrum purchases made in 2016, the company still owed around Rs 15,000-16,000 crore including interest on the remaining partial dues from the 2015 spectrum auction and 2014.
The company at the time purchased a total of Rs 11,054 crore of spectrum in 2014, and additional spectrum worth Rs 10,077 crore in 2015.
But while Airtel and Vi are struggling with their finances, Jio Infocomm is in much better financial health and hopes to settle dues via the corporate bond route as their interest rates are well below the 10% rate. that the government charges on the moratorium.
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(Edited by : Shoma Bhattacharjee)