Reliance Communications is set to secure a $1.93-billion long-term loan from China Development Bank. The tenure of the loan is 10 years.
According to RCom, the money will be used to refinance the loan taken for buying 3G spectrum and also to buy telecom network equipment from Chinese vendors Huawei and ZTE. RCom is expected to sign a memorandum of understanding with the Chinese bank on Wednesday.
$1.33 billion of the loan amount is expected to be used to settle the short-term loans taken from Indian banks for buying 3G spectrum. The balance will be used for financing equipment deals from Chinese vendors.
As on September 2010, RCom's debt stood at Rs 30,000 crore. The loan from Chinese Development Bank is expected to result in interest savings of around Rs 500 crore a year for RCom.