Bengaluru, NFAPost News Service: Reliance Jio Infratel plans to raise Rs 25,000 crore through a listing of the business as an investment trust and use a third of it to repay State Bank of India, Bank of Baroda and HDFC Bank among others.
Reliance Industries is also planning to receive nearly Rs 10,000 crore from the trust which wants to repay some loans given by the parent company from the listing.
The transaction will help RIL reduce its debt and allow Reliance Jio Infratel to borrow funds on its own.
RIL is awaiting Sebi’s final nod for its deal with Brookfield, which plans to invest Rs 25,215 crore to buy Reliance Jio’s tower infrastructure. “This money will be used to repay bank loans,” sources said.
The company has to repay SBI Rs 7,000 crore, Bank of Baroda Rs 3,000 crore and HDFC Bank Rs 1,500 crore. It has to pay loans to other banks also.
Moreover, banks are in final stages of sanctioning loans to the special purpose vehicle held by the trust, which will receive the money to fund RJIL’s tower business.
“Most banks have sanctioned these loans because the debt to equity ratio in the SPV is 1:1, which means it is almost risk-free,” a person told Economic Times.
The banks assume that Reliance Jio is well placed, given its market penetration in India and the loans would be used for tower business. The entire process could be completed by early March.