RELIANCE COMMUNICATIONS;FCCB REDEMPTION UPDATE

The following source-based information has been accessed from the news-wires for the information of Readers:

India's Reliance Communications, which has a $925 million convertible bond maturing in March and has failed so far in efforts to sell its tower unit, is in talks with China Development Bank  for a loan to redeem the bond, a person with direct knowledge of the matter said. 

The company has been trying for more than a year to sell its tower business in a deal that could be worth more than $3 billion.

Separately, two sources with direct knowledge of the matter said a deal for the towers, which would allow the company to pay down a big chunk of the $6.5 billion in net debt on its books as of the end of September, was not close to completion.The company has been in talks with US buyout giants Carlyle Group and Blackstone Group on a deal for the towers business, according to sources.

Reliance Communications is looking to secure a leasing agreement for its towers from Reliance Industries, controlled by Anil Ambani's once-estranged brother Mukesh, before pressing forward with a tower sale, the two sources said.

In a statement to Reuters, a Reliance Communications spokesperson said: "RCOM will ensure timely redemption of FCCBs (foreign currency convertible bonds) due in March 2012," but declined further comment.

Reliance Communications is in talks with state-owned China Development Bank for a syndicated loan of $925 million, the same size as the convertible bond, the first source said.The bank is likely to approach other Chinese lenders about syndicating the loan, the source said.Terms are still to be worked out, and a loan is not likely to be launched until February, after China's Lunar New Year holiday later this month, this person said.