Tisco Seeks bn Loan From Japan Exim

The Tata Iron and Steel Company Ltd (Tisco) has sought an eight billion yen loan from Japanese Export and Import Bank (J-Exim) for its proposed cold rolling mill (CRM) project at Jamshedpur.

"Tisco applied for the loan in early 1998 and the Corporate and Project Analysis Department in Tokyo is studying the proposal," J-Exim chief representative for south Asia Masahito Ikeda said.

The bank is likely to decide on the loan by the end of this month, Ikeda said. A project appraisal team from the bank has already visited Jamshedpur and Mumbai and held discussions with senior Tisco officials for the proposed loan, he said.

 

"The team collected necessary data and financial details of the company and is presently evaluating the long term prospects of Tisco," he said. Tisco has sought the long-term loan without any bank guarantee under the 'Buyers' credit scheme'.

If the loan proposal materialises, Tisco would have to buy at least 30 per cent of the equipment for the project from Japanese companies under the credit scheme, he said. Tisco has already given the equipment supply contract for the CRM project to Japanese trading company Nissho Iwai.

Ikeda said the Tokyo office was evaluating the risk factors involved and would provide the loan according to the shipments made from the Japanese trading company.

He said the terms and conditions for the loan agreement would be according to the OECD guidelines. Ikeda, who was also a member of the appraisal team, said: "In my personal opinion, Tisco is a good company and I think it would be able to meet the international competition." J-Exim would assess the financial strength of Tisco and also look at the Indian steel industry, before sanctioning the loan, he said.

Asked about the fate of proposed $650 million loan for Hinduja's power project in Vishakapatnam, Ikeda said the bank was still awaiting important documents like the counter-guarantee, fuel supply agreement and power purchasing agreement from the company. "We can start the negotiations with them only after getting these essential documents, as they act as our security package for the loan," he said.