Mushroom Cloud Over Corporates

IDBI recently approved a Rs 400 crore loan to the company to meet its foreign currency loan requirements and guarantees. ICICI will privide Rs 600 crore for the project and IFCI will provide Rs 200 crore in the form of guarantees

Domestic financial institutions led by ICICI and the Japanese EXIM Bank have sanctioned a Rs 1942 crore loan package for the 520mw BPL power project in Andhra Pradesh.

The company has recently got approval from IDBI for Rs 400 crore to meet the foreign currency loan requirements as well as guarantees.

Apart from this, ICICI will provide Rs 600 crore towards the project while IFCI will provide Rs 200 crore in the form of guarantees.

The power company has already got approval from the Japanese Exim bank for a loan of Rs 641 crore in the form of Yen loan as well as another Rs 524 crore (123.4 million dollars) . The JEXIM loans are being guaranteed by the Indian FIs and banks in the form of deferred payment guarantees.

The Rs 2776 crore power project is being financed on the basis of 70:30 debt equity ratio, of which the debt component amounts to Rs 1942 crore.

The project has an estimated non fund based support of Rs 1165 crore in the form of guarantees amounting to 60 per cent of the total debt funds (also called fund based support) for the project.

The debt comprises of rupee loans amounting to Rs 277 crore, foreign currency loan from the Japanese EXIM bank amounting to Rs 1165 crore as well as another Rs 500 crore also in terms of foreign currency loans from financial institutions and banks.

ICICI, which is the lead arranger for the project, has already sanctioned Rs 50 crore by way of rupee term loan and a foreign currency loan of Rs 250 crore and deferred payment guarantee (DPG) equivalent to Rs 300 crore. IFCI has also sanctioned DPG assistance to the power project equivalent to Rs 200 crore.

ICICI's rupee term loans will be done through the subscription of 50lakh non convertible debentures of the face value of Rs 100 each.

Apart from the three Fis, the power company has got an approvals from Power Finance Corporation, IDFC, Canara Bank and Hudco for lending Rs 800 crore towards the project. Bulk of these funds will be used either as guarantees or the rupee

IDBI on the other hand will provide Rs 200 crore in the form of foreign currency loans and another Rs 200 crore in the form of DPG.

The equity funds for the project---amounting to Rs 834 crore ---is being brought in the BPL group (63 per cent), Marubeni (26 per cent) and EPDC (11per cent). Out of the 63 per cent of the equity that the BPL group plans to invest in the project, Rs 283 crore will be in the form of rupee equity while the foreign equity will be Rs 242 crore.