Mumbai Metro One to convert Rs 2,100-cr loan into dollar one

Hopes to reduce substantially annual interest burden

Please read the clarification at the end of the article which incorporates Mumbai Metro One's response.

Reliance Infrastructure (R-Infra) arm Mumbai Metro One Pvt Ltd (MMOPL), which operates the 11.4-km Mumbai Metro, wants to convert its long-term rupee loan worth Rs 2,100 crore into a dollar loan.

The company will soon start an exercise in this regard, as the Reserve Bank of India had revised external commercial borrowings, allowing refinancing of operating assets through dollar or euro loans.

An R-Infra official, who did not want to be quoted, told Business Standard, “The company will explore an option of converting its long-term rupee loan of Rs 2,100 crore into dollar loan. This is in line with company’s attempt to bring down annual interest cost which is Rs 210 crore.”

MMOPL might also examine raising a loan at concessional rate from Japan International Cooperation Agency to further reduce interest payment. The company is also pursuing its plea with the state government for a one-time grant of Rs 1,000 crore, monthly subsidy of Rs 21.75 crore and exploitation of real estate along the railway stations.

The 11.4-km Versova-Andheri-Ghatkopar Metro corridor was completed with a revised project cost of Rs 4,000 crore, of which Rs  2,100 crore was a long–term rupee debt originally raised from IDBI Bank.

MMOPL, currently locked in the legal battle with state undertaking Mumbai Metropolitan Region Development Authority on a fare revision proposal, had in March refinanced its rupee loan from Syndicate Bank and six other banks. This resulted in a cut in interest rate from 13 per cent to 11.75 per cent. As on date, the floating interest rate is 11.2 per cent.

CLARIFICATION
Mumbai Metro One Pvt Ltd has clarifiied that it is not exploring any option to convert its long-term rupee loan of Rs 2,100 crore into a dollar-denominated loan. It also said that it has no plans to explore such options. We stand corrected.