RCom shares zoom on loan refinancing deal with Chinese banks

Reliance Communications (RCom) shares on Tuesday surged over 5 per cent in morning trade before closing the day 2.4 per cent higher, as the company announced its plans to refinance a Rs 6,125 cr loan.

The Anil Ambani-led company announced on Tuesday the refinancing for RCom's outstanding FCCBs (Foreign Currency Convertible Bonds) worth Rs 6,125 crore would be provided by Chinese banks including Industrial and Commercial Bank of China, China Development Bank and Export Import Bank of China.

Following the announcement, shares of the company jumped 5.61 per cent to an early high of Rs 91.30 on the Bombay Stock Exchange, before closing the day 2.4 per cent higher at Rs 88.85.

The loan proceeds would be used for refinancing the entire redemption amount of FCCB which are due for redemption on March 1, 2012.

FCCBs are bonds that are issued in currencies different from the issuing company's domestic currency.

Reliance Communications is the flagship company of Anil Ambani-led Reliance Group. The group currently has a net worth in excess of Rs 89,000 crore ($19.7 billion), cash flows of Rs 10,900 crore ($2.8 billion), net profit of Rs 3,600 crore ($0.8 billion).