MUMBAI, Nov 26 (Reuters) - India's central bank has relaxed
overseas borrowing rules for successful bidders in the country's
cellphone airwaves auction, making it easier for them to raise
money to pay the cash-strapped government.
The Reserve Bank of India (RBI) said on Monday the winning
bidders could use short-term foreign currency loans as bridge
finance, without seeking approval from regulators.
The companies can then replace these short-term borrowings
with long-term external (or overseas) commercial borrowings
(ECB), provided the ECB is raised within a period of 18 months
from the drawdown of the bridge finance, it added.
The mobile operators will also be able borrow from their
parent companies without any limit, provided the parent owns a
minimum 25 percent equity in the local company, the RBI added.
The central bank said successful bidders making upfront
payments for spectrum via rupee loans would be able to refinance
those loans with a long-term ECBs, also without seeking
Five companies - a unit of Norwegian telecommunications
carrier Telenor, Vodafone Group Plc's Indian
unit, Idea Cellular, Videocon Telecommunications and
Bharti Airtel Ltd - bought airwaves worth a total 94
billion rupees ($1.7 billion) in an auction earlier this month.
The auction raised less money than the government hoped, and
officials have since said it will struggle to meet its deficit
target for 2012-13.
The companies are required to pay by Dec. 1, although they
can pay in installments.