Sbi Caps To Arrange Rupee Term Loan

SBI Capital Markets, the capital markets services arm of the State Bank of India (SBI) group, will arrange for a syndicated rupee term loan for Haldia Petrochem Ltd (HPL). The loan, amounting to Rs 1,000 crore, will be arranged by SBI Caps and syndicated from commercial banks.

This loan will carry a deferred payment guarantee from SBI Capital Markets, which reduces the risk on the loan. The interest rate on the loan is yet to be fixed. With commercial banks allowed to extent term loans upto Rs 500 crore, the Haldia placement is expected to go through.

Sources feel the State Bank of India, the parent of SBI Caps might pick a major chunk of the loan. The rest will be distributed amongst various other commercial banks.

 

The move to place the term loan with commercial banks comes as a result of their aggressive entry into term lending.

Recently, financial institutions made a strong entry into working capital, which is the turf of commercial banks. Commercial banks in turn are now entering term financing.

Top level sources in SBI Caps said the money is being raised towards financing HPLs new petrochem project.

The project involves an integrated petrochem complex which will be set up in eastern India.

The complex will act as the sole server for the region as well as neighbouring countries including Nepal, Bhutan and Bangladesh.

The total project cost has been set at Rs 5,170 crore. In addition to the rupee term-loan, there will be other funds including Rs 950 crore which will be mobilised from development financial institutions. Besides, there is promoters equity of Rs 1,010 crore, as well as paid up value of Rs 501 crore.