Reliance Industries looks to increase funds for Infotel

9 Nov 2010

Infotel Broadband Services, the telecoms unit of Reliance Industries (RIL), is reportedly in talks to borrow around USD1.5 billion for the rollout of commercial operations and acquisition of equipment, India’s Economic Times is reporting. The new funds are expected to be raised at 6%-7%, or around 200-300 basis points over the London Interbank Offered Rate (Libor), the benchmark lending rate in Europe, the report said quoting an unnamed source.

With RIL having previously said it planned to spend around USD4 billion on launching in the telecoms space, a significant chunk of that was spent on the acquisition of Infotel; as previously reported by CommsUpdate, in June 2010, less than a week after Infotel had acquired a pan-India Broadband Wireless Access (BWA) licence, RIL agreed to pay USD1 billion for the company. In addition, it is also believed that RIL also agreed to pay the INR128.48 billion (USD2.74 billion) fee for the spectrum that Infotel won as part of the deal, while it will invest a further INR48 billion in subscribing to fresh equity that is to be issued.

India, Infotel Broadband (Reliance Industries - RIL)