Mukesh Ambani, India's wealthiest individual, and his son Akash Ambani are spearheading an effort to secure Rs 16,550 crore (Rs 1 crore = $120,873) in offshore loans for Reliance Jio Infocomm, their telecom company. This significant financial boost will be provided by BNP Paribas (OTC: BNPQY ) over a nine-month period, according to the Economic Times.
The funds will be used to expand Jio's 5G network in India. Specifically, the money will be used to source 5G network gear from Sweden's Ericsson (BS: ERICAs ) as part of the company's ambitious expansion strategy. The loan will be repaid to Ericsson, BNP Paribas, and a few other banks over the duration of the nine months. However, the exact repayment amounts to each entity have not been disclosed.
It's worth noting that this isn't Mukesh Ambani's first instance of raising funds for Jio. During Reliance Industries' annual general meeting, he revealed that Jio had previously partnered with Swedish export credit agency EKN for a $2.2 billion funding deal to finance equipment and services required for the 5G rollout.
The loan process for Reliance Jio Infocomm is structured as a discounted process, and the implicit interest rate will be determined over the nine-month period.
Reliance Jio's 5G service is now available in all of its 22 Licensed Service Areas (LSAs) across various spectrum bands. This makes it the fastest rollout of a 5G network of this scale globally. With spectrum holdings in the 700MHz, 800MHz, 1800MHz, 3300MHz and 26GHz bands, Jio boasts the largest spectrum footprint. In addition to this, Jio also has 1,000 MHz in the millimeter wave band (26 GHz) in each of its 22 circles.
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