With the help of funds from its internal accretions and the foreign exchange proceeds, Reliance Communications intends buying back foreign currency convertible bonds (FCCBs) at a mark down, depending upon the central bank approval.

A tender offer, for repurchasing the bonds for cash at a discount, has been issued by the company to all its bond holders.

Out of the $1 billion FCCBs - listed on the Singapore Exchange Securities Trading - that India's second-largest mobile phone service provider had issued, it has already repurchased $40 million; with nearly $950 million worth of bonds still outstanding. The bonds are due in 2012.

In a Wednesday-released note to Bombay Stock Exchange, Reliance Communications said: "The amount of bonds repurchased will be determined by the company at its discretion."

Nonetheless, the amount of FCCBs repurchased by the company will determine not only the gains to the size of the discount, but also the extent of reduction of debt from its balance sheet.