RBI relaxes borrowing rules for mobile auction winners
MUMBAI (Reuters) - The Reserve Bank of India (RBI) has relaxed overseas borrowing rules for successful bidders in the country's cellphone airwaves auction, making it easier for them to raise money to pay the cash-strapped government.
The RBI said on Monday the winning bidders could use short-term foreign currency loans as bridge finance, without seeking approval from regulators.
The companies can then replace these short-term borrowings with long-term external (or overseas) commercial borrowings (ECB), provided the ECB is raised within a period of 18 months from the drawdown of the bridge finance, it added.
The mobile operators will also be able borrow from their parent companies without any limit, provided the parent owns a minimum 25 percent equity in the local company, the RBI added.
The central bank said successful bidders making upfront payments for spectrum via rupee loans would be able to refinance those loans with a long-term ECBs, also without seeking regulatory approval.
Five companies - a unit of Norwegian telecommunications carrier Telenor (TEL.OL), Vodafone Group Plc's (VOD.L) Indian unit, Idea Cellular (IDEA.NS), Videocon Telecommunications and Bharti Airtel Ltd (BRTI.NS) - bought airwaves worth a total 94 billion rupees in an auction earlier this month.
The auction raised less money than the government hoped, and officials have since said it will struggle to meet its deficit target for 2012-13.
The companies are required to pay by December 1, although they can pay in installments.
(Reporting by Shamik Paul; Editing by Mark Potter)
- Tweet this
- Share this
- Digg this
- UPDATE 8-Dallas Ebola patient vomited outside apartment on way to hospital
- Boxer Sarita Devi faces action after refusing medal at Asian Games
- Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle
- Putin says Russia wants to move to national currencies in trade
- China tells foreign countries not to meddle in Hong Kong
BACK IN JAIL
Subrata Roy, the jailed chief of India's Sahara conglomerate, is back in a cell after living in a makeshift prison office for two months as he tried to negotiate the sale of his luxury hotels, a jail official said. Full Article
Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle. Full Article
Diageo bars United Breweries from appointing independent director at United Spirits. Full Article