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China courts India’s Reliance
20 January 2012
The latest round of Chinese state support for India’s Reliance Group adds to China’s dominance of this intra-Asian trade link.
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Reliance Telecom
Three of China’s state-owned banks have issued a $1.2 billion loan to the telecommunications division of India’s Reliance Group in order to refinance foreign currency convertible bonds which mature in March.
China Development Bank (CDB), The Export-Import Bank of China (China Exim) and Industrial & Commercial Bank of China (ICBC) closed the deal on 17 January 2011, which will no doubt strengthen the relationship between the Indian conglomerate and its Chinese contractors.
The seven-year credit facility bears an attractive 5% margin: the rate is lower than China’s domestic long-term loan rate, and well below the 12% benchmark of Indian lenders.
This comes at a time when Reliance’s domestic financing resources are drying up because of...
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