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Maldives has assured protection to lenders' money: IOB

Press Trust of India  |  Mumbai 

The quantum of compensation, however, will be decided through an arbitration process.

The Maldives government is poised to take over the Male International Airport with GMR agreeing to meet the midnight deadline to hand over the operations after the Indian infrastructure major lost a week-long legal battle.

"The Maldivian government has sent us a comfort letter, through Axis Bank, which is the lead lender to the Male airport project, to protect our money.

The quantum of compensation will be decided through an arbitration process," the state-run CMD M Narendra told PTI.

IOB had agreed to lend USD 50 million to the Male airport project, out of which it had already lent USD 25 million, he said.

The GMR Group had also secured a USD 358 million funding pipeline from Axis Bank, out of which it had already taken USD 160 million loan for the project, from Axis Bank's Singapore branch.

officially refused to comment.

A source at the bank said: "Maldives government has assured of compensation. The exact quantum of the compensation will be decided through arbitration".

The source also said had last week sent a legal notice to the Maldivian administration through a Singapore-based firm seeking protection of its funds lent.

Earlier, a GMR official had also confirmed that the bank had slapped a legal notice on Male, as the then Maldives government had stood guarantee to the funds, and that contract cancellation means the government should honour its commitment.

First Published: Fri, December 07 2012. 22:25 IST