RCOM closes tender offer for FCCB buyback

MUMBAI: Reliance Communications (RCOM) on Monday closed the tender offer for buyback of foreign currency convertible bonds (FCCBs).

The telecom company of the Reliance Anil Dhirubhai Ambani Group (R-ADAG) has bought back FCCBs amounting to $24.7 million of face value from foreign investors for $21 million, or at a 15% discount.

A person close to the development told ET the buyback was funded through RCOM���s EEFC (exchange earners��� foreign currency) account, resulting in debt reduction to the extent of the face value of FCCBs. The company gained nearly $3.7 million from the exercise, he said.

RCOM had earlier bought back FCCBs with face value of $40 million in tranches during October 2008 to March 2009. ���In October last year, when the panic in the global financial market was at its peak, the company saw discount of as high as 50% of the face value of FCCBs. The discount came down to 25-30% in February-March, and now it further fell to 15%, indicating the underlying credit worthiness, liquidity and expected share price performance,��� he said.