Largest syndicated Re-term loan in Indian debt market
Mumbai   15-May-2009
A consortium of 21 lenders, led by the State Bank of India, has committed a rupee term loan of Rs 14,900 crore to IndianOil for its 15 MMTPA grassroots refinery projected at Paradip, Orissa. This transaction, the largest syndicated rupee-term loans arranged in the Indian debt markets for a single project, comes at a time when both global and domestic economies have started witnessing signs of revival. The term loan facility having a door-to-door tenor of 14 years has been tied up through a consortium of 19 public sector banks and two financial institutions, LIC and HUDCO, SBI Caps said on Thursday while announcing the financial closure of the project. The project envisages a total outlay of Rs 33,504 crore which is proposed to be funded by a combination of debt and equity. While debt would be through rupee and foreign currency loans, the equity would be via internal accruals. The present financing pertains to the domestic component of the capital expenditure, SBI Caps said. It has structured the facility to pass on the benefits of declining interest rate to the borrower during its entire tenor of 14 years. The other key features of the transaction include a 'ring-fenced' project finance deal which ensures that the other borrowing programmes of the state-owned refiner are least affected and at the same time the lenders derive comfort from the Indian Oil balance-sheet, it said. The project is likely to be commissioned by early-2012 and its implementation is going on in full swing. IndianOil is financing the project in 1.5:1 debt-equity ratio. The board of IndianOil had last year split the refinery-cum-petrochemical complex into two, deciding to do the refinery first and the chemical unit will follow later.