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Overview

ICBC contributes to $925.5 million syndicated loan to help Reliance Communications repay its debts (Linked to Record ID#54352, #56456, and #98825)

Commitments (Constant USD, 2023)$334,249,420
Commitment Year•2012Country of Activity•IndiaDirect Recipient Country of Incorporation•IndiaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Feb 22, 2012

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

State-owned Policy Banks

  • China Development Bank (CDB)
  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Private Sector

  • Reliance Communications Ltd.

Collateral providers

Private Sector

  • Reliance Communications Ltd.

Loan desecription

In 2012, Chinese banks (contains ICBC Facility I) contribute to USD 925.5 million syndicated loan to Reliance Communications to help repay its debts, India

Interest rate (t₀)•5.5031%Interest type•Variable Interest Rate

Collateral

(1) a first pari passu charge over the present and future moveable plant and machinery and capital work in progress of, and all rights, title, interest, benefits, claims and demands under and in respect of all insurance contracts entered into in relation to these assets by Reliance Communications Limited, Reliance Communications Infrastructure Limited, Reliance Infratel Limited and Reliance Telecom Limited; (2) assignment of 20 unified access service licenses, a national long-distance license and an international long-distance license of Reliance Communications Limited; and (3) pledge of: (i) 66,980,095 equity shares of Reliance Telecom Limited held by Reliance Communications Limited; (ii) 18,019,900 equity shares of Reliance Telecom Limited held by Reliance Infocomm Infrastructure Limited; and (iii) 9,379,999,994 equity shares of Reliance Communications Infrastructure Limited held by Reliance Communications Limited

Narrative

Full Description

Project narrative

On February 22, 2012, Reliance Communications Ltd., an Indian mobile network provider, entered into a $925.2 million term loan facility agreement (ICBC Facility I) with China Development Bank Corporation, the Export-Import Bank of China, and the Industrial and Commercial Bank of China Limited (ICBC). The loan carried an interest rate of LIBOR plus a margin of 4.75%. Its maturity and grace period are unknown. It was secured by (i.e. collateralized against) (1) a first pari passu charge over the present and future moveable plant and machinery and capital work in progress of, and all rights, title, interest, benefits, claims and demands under and in respect of all insurance contracts entered into in relation to these assets by Reliance Communications Limited, Reliance Communications Infrastructure Limited, Reliance Infratel Limited and Reliance Telecom Limited; (2) assignment of 20 unified access service licenses, a national long-distance license and an international long-distance license of Reliance Communications Limited; and (3) pledge of: (i) 66,980,095 equity shares of Reliance Telecom Limited held by Reliance Communications Limited; (ii) 18,019,900 equity shares of Reliance Telecom Limited held by Reliance Infocomm Infrastructure Limited; and (iii) 9,379,999,994 equity shares of Reliance Communications Infrastructure Limited held by Reliance Communications Limited. The purpose of the loan was to help Reliance Communications repay its debts. Record ID#56456 captures CDB's contribution. Record ID#98825 captures China Eximbank's contribution. Record ID#98826 captures ICBC's contribution. As of December 31, 2014, the (principal) amount outstanding under this loan facility. Reliance Communications Ltd. entered bankruptcy and liquidation procedures on November 15, 2018, and admitted the supervision by the resolution professionals of Deloitte India. Anil Ambani quit as chairman of the board of Reliance Communications in November 2019. Then, on May 22, 2020, the Commercial Division of the High Court of England and Wales in London ordered Anil Ambani, the former chairman of the bankrupted Reliance Communications Ltd., to pay approximately $717 million to CDB, ICBC, and China Eximbank within 21 days, pursuant to the February 22, 2012 facility agreement and a binding personal guarantee. According to an order from the court, the defendant (Anil Ambani) was to pay a sum of $716,917,681.51 to the claimant (tCDB, ICBC, and China Eximbank) pursuant to the guarantee, including the principal amount outstanding under the facility agreement of $549,804,650.16; interest outstanding as of May 22, 2020 of $51,923,451.49; and default interest due of $115,189,579.86.

Staff comments

1. The all-in interest rate was estimated by adding the 6-Month LIBOR rate at the time of agreement (0.757%) to the margin of 4.75%, for a coded interest rate of 5.507%. 2. The individual contribution of three lenders to this $925.5 million USD syndicated loan is unknown. For the time being, AidData has estimated the contribution of CDB, China Eximbank, and ICBC by assuming that each lender contributed an equal amount ($308,400,000 USD) to the syndicated loan.