Anil Ambani knocks on China's doors yet again to borrow money for Reliance Comm

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Anil Ambani is tapping Chinese lenders for a second time in less than a year after a decline in the value of his flagship company left him with almost $1 billion of convertible bonds to repay by March

Reliance Communications yesterday said it will borrow $1.18 billion from Chinese lenders China Development Bank Corp, Export-Import Bank of China and Industrial & Commercial Bank of China. The proceeds will be used for Anil Ambani’s mobile-phone operating company to redeem convertible debt maturing on March 1.

The credit will help China expand its role in the India, the world’s second-fastest growing major economy, that’s also competing with the north Asian nation for resources.

Anil Ambani is tapping Chinese lenders for a second time in less than a year after a decline in the value of his flagship company left him with almost $1 billion of convertible bonds to repay by March.

The Chinese loans will help India’s second-largest mobile-phone operator cap its interest expense for the borrowing at 5% even after dollar funding costs for Indian companies climbed 171 basis points in 2011 to 6.83%, according to a research report.

The Reliance Communications stock gained 2.8% to Rs 88.85 on the Bombay stock Exchange yesterday. The company’s shares declined a whopping 52% in dollar terms last year making it the worst-performing stock in the 28-member MSCI AC Asia Pacific, excluding-Japan, Telecommunication Services Index.