RIL issues ₹7,706 crore guarantee for Samsung’s 5G equipment supply to Jio

New Delhi: Reliance Industries Ltd (RIL) has provided a Rs7,706 crore letter of guarantee to Samsung India Electronics Pvt. Ltd aimed at facilitating credit extension to its subsidiary Reliance Jio Infocomm Ltd (RJIL) for procuring telecom equipment, RIL said on Wednesday.

According to RIL, the guarantee offered by the company is an ongoing commitment, valid until all obligations are fulfilled by Reliance Jio. “RJIL is in compliance with its obligations toward Samsung India and, accordingly, the guarantee does not have any adverse impact on RIL,” the company said in a statement.

This funding arrangement to procure equipment follows Jio’s $2.2 billion fundraising from the Swedish export credit agency EKN in FY23. The capital will be utilized to finance procurement of equipment and services required for Jio’s pan-India rollout of 5G services, RIL said in its annual report last week.

“The transaction was heavily oversubscribed in the primary syndication market by global lenders across geographies,” the firm added.

Jio is firmly committed to investing Rs2 trillion for establishing nationwide 5G services. The 5G network rollout started in October 2022. As of 31 March 2023, Jio had launched its 5G services in over 2,300 cities and towns. It aims to achieve nationwide coverage by December.

In its annual report, RIL also said that along with its subsidiary Jio Infocomm, it had secured a total of $3 billion through syndicated term loan facilities.

Additionally, Jio had earlier disclosed a $2.1 billion deal for procuring equipment from Ericsson, a leading Swedish network equipment provider.

Jio had also announced in 2022 that it had signed agreements with global network equipment providers Nokia, Ericsson, Samsung and Cisco for the rollout of its pan-India 5G network.