Reliance Jio Infratel plans to raise rs 25,000 crore for capex, retreating debt

Reliance Jio Infratel Private Limited (RJIPL), owned by Tower Infrastructure Trust holding 51 per cent of the share, is an Infrastructure Investment Trust. Reliance Industries strategies aims to raise Rs 25,000 crore (US$ 3.47 billion) to fund its capital expenditure and retire old loans. 

This fund-raising drive is distinct from Reliance Jio Infocomm Ltd, which is raising funds on its own from both national and overseas markets. RJIPL achieves and works the tower assets of Reliance Jio. This fund raising is expected to be completed by end of September where out of US$ 3.47 billion, US$ 1.4 billion will be raised as commercial paper and rest will be long- term debt. 

Additional US$ 695 million will also be raised by Jio Digital Fibre Private Limited of which 51 per cent is owned by Digital Fibre Infrastructure Trust, an Infrastructure Investment Trust (InvIT). The balance stake held by Reliance Industries. 

Both Jio Digital Fibre Pvt Ltd and RJIPL have entered 20-year agreements with Reliance Jio Infocomm to meet the infrastructure necessities of the telecom giant. Both companies plan to repay their debt with assured cash flow from Reliance Jio Infocomm Ltd which will secure tenant for both companies.

Jio Infocomm, a 100 percent subsidiary of Reliance Industries, recently has undertaken a noteworthy rebuilding of its assets, where all the telecom tower and fiber optic resources, have been moved to the two foundation ventures trusts. Apart from these assets, Reliance Jio Infocomm will also transfer its debt worth $15.4 billion to the two trusts. This will reduce debt of Reliance Jio Infocomm substantially estimated at $26 billion.

The move will help Reliance Jio Infocomm to deleverage its own accounting report and at the equivalent permit the two InvITs to rent the pinnacle and fiber advantages for outsiders to procure incomes.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.