Reliance Jio In Talks To Raise Upto $2 Billion Through BNP Paribas

Jio Infocomm is in the process of raising up to $2 billion in offshore loans to further its 5G initiative. The French multinaltional bank BNP Paribas is going to be the lead arranger of this loan. Jio is going to purchase 5G network gear from the Swedish telecommunations company, Ericsson, through this money.

The $1.9 billion–2 billion or about Rs 16,550 crore loan will be provided in tranches through a nine month period by BNP Paribas. During this period, Reliance will also be paying back the money to Ericsson, BNP and some other banks, according to a report by The Economic Times.

The loan will be provided at a discounted rate and the implicit interest rates will only be arrived at during the course of the nine-month period.

In addition, Swedish export credit agency EKN will be providing a cover of $2.2 billion to Reliance Jio. The cover will protect the stakeholders in this deal – Ericsson, BNP Paribas and a few other banks, from imminent risks.

A number of industry experts have highlighted the importance of this cover by EKN, since the monetization of 5G services is at least a year away in India. This is because there is an absence of an ecosystem in terms of devices. Moreover, Jio’s massive chunk of offshore loans means that a further depreciation of the rupee against the US Dollar could increase the company’s foreign debt repayment burden.

Jio is also buying 5G equipment from Finland’s Nokia, according to reports. The company had earlier said that it will make an aggregate investment of $25 billion. The company is on track to establish countrywide 5G coverage by December 2023, with a pre-existing base of about 50 million 5G users.