Reliance Communications to repay short term loans (India)
Reliance Communications Limited has drawn down first tranche of US$ 665 million from China Development Bank underwritten facility of US$ 1.93 Billion.
The facility includes US$1.33 billion for refinancing 3G spectrum fee payment and US$600 million for equipment imports from Chinese Vendors.
The drawn down amount will be utilized to refinance company’s short term rupee borrowings resulting in substantial savings in its interest cost apart from extending its debt maturity profile.
The loan facility is fully underwritten by CDB and is being funded by a syndicate of Chinese Banks and Financial Institutions including CDB. This is the first and largest ever syndicated loan for refinancing spectrum fees by any telecom company.
RCom gets $1.92 bn loan from China Development Bank (India)
Reliance Communications (RCom) has finalized a $1.93 billion Chinese loan which will help it save millions of interest. The loan, the largest ever between the two Asian giants, comes amid often frosty relations.
According to Reliance, it will use $1.33 billion to refinance pricey 3G spectrum fees and the rest for imports of Chinese telecom equipment from Huawei and ZTE. It would see annual interest cost savings of more than $111 million.
China Development Bank has underwritten the loan and is part of a consortium of Chinese banks providing funding. Reliance Communications, India’s second biggest mobile phone operator, had in December signed an accord with China Development Bank for a $1.93 billion, 10-year, syndicated loan.
The drawdown of the loan is likely to start this month.
Reliance Communications has to reduce a $7 billion mountain of debt ahead of major bond redemption next year.
EU to end Chinese telecom probe despite subsidies
The European Union will drop its inquiry into whether China is giving illegal aid to two of its leading telecom firms, even as the EU’s executive cites evidence of massive subsidies, according to EU Commission documents.
The Commission will propose ending two investigations into illegal export pricing by and state aid to Chinese wireless modem producers after the withdrawal of the complaint by Europe’s main producer, Belgium’s Option, late last year, according to a confidential document seen by Reuters.
The proposal is expected to be approved by European Union governments later this month, ending a case industry players had expected to be a litmus test of the EU’s willingness to challenge Chinese state subsidies. “It would be disproportionate to continue with the investigation and impose measures following the withdrawal of the complaint,” the Commission said in its document, which was distributed on Tuesday to interested parties in the case.
But in a separate document also dated Tuesday and distributed to EU governments, the commission cites evidence – gathered since last summer – that China’s main telecom producers Huawei and ZTE are state-controlled and receive cheap state loans that give them an unfair advantage over their European rivals.
“We would welcome the termination of the investigations as we reject any accusations of injurious dumping and subsidisation,” Huawei said in a statement. ZTE has also denied receiving state aid, but could not be reached for comment.
There was no comment from the EU Commission. Huawei and ZTE have denied receiving state aid, and neither company could immediately be reached for a response. Option dropped its complaints of Chinese subsidies and export dumping after it reached a co-operation agreement with Huawei in October.
According to the Commission, ZTE received credit lines of $15 billion from the China Development Bank and $10 billion from the China Export-Import Bank in 2009. The Commission’s findings also include allegations that ZTE and Huawei are still influenced by the state.
Beyond wireless modem manufacturing, the growth of Huawei and ZTE in other sectors has worried European telecoms hardware and network infrastructure producers such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent.
ADAG to get $3 billion loan from China banks (India, China)
If reports are to be believed, the Reliance-Anil Dhirubhai Ambani Group (R-ADAG) will get around $3 billion in loan as a part of deal that will be signed during the visit of Chinese Premier Wen Jiabao.
According to reports, part of the money would be used to fund equipment purchases from Chinese companies by the Indian group’s telecom and power units.
The report added that Reliance Communications, India’s second-biggest mobile phone operator and controlled by billionaire Anil Ambani, will sign an accord with China Development Bank for a $1.93 billion, 10-year loan.
According to Reliance Communications spokesman, a deal would be signed with China Development Bank for a loan, but declined to give details.
Datang receives loan for 3G network (China)
Datang Telecom Technology & Industry Group (Datang Group) has been approved for a CNY30 billion (USD3.89 billion) long-term bank loan from China Development Bank to support the company’s 3G technology development and network construction, the company said in Beijing today. The loan will be used to boost the development of TD-SCDMA (time division-synchronous code division multiple access) and large-scale network construction for the coming Beijing Olympic Games in 2008, according to a statement posted on Sina.com. Datang Mobile, the group’s unlisted firm, is the major developer of TD-SCDMA, which covers chip blueprints, handset design and network construction.
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