Cairn India ties up $1.6 bn for Rajasthan project

Cairn India has raised funds worth $1.6 billion from domestic and overseas lenders to repay an existing debt and to accelerate the ongoing Rajasthan Project where crude oil production commenced a week ago.

“We have been able to tap funds from two disparate markets in challenging times. The proceeds will be used to repay the existing debt of $850 million and accelerate other commissioned parts of the Rajasthan project,” said Indrajit Banerjee, chief financial officer, Cairn India.

Cairn had borrowed $750 million in US dollars and Rs 4,000 crore (about $850 million) in rupees. The international borrowing consists of a fully underwritten portion of $500 million by Standard Chartered Bank, UK and a $250-million loan by International Finance Corp, a member of the World Bank Group. The domestic borrowing has been underwritten by State Bank of India.

A fully underwritten loan means the lending banks are free to invite other financial institutions or banks to join the facility, Banerjee said, adding that Standard Chartered and SBI have underwritten the foreign and domestic loan portions respectively.