Financial Daily from THE HINDU group of publications
Friday, Jun 28, 2002
GMR group ties up Rs 557-cr debt for road projects
NEW DELHI, June 27
A GROUP of banks led by ICICI Bank has sanctioned an amount of Rs 557 crore to the Bangalore-based GMR group for debt-funding its two highway projects on an annuity route.
"The financing documents for the loan were signed on Wednesday'', a company statement said.
The 60-km-long highway project between Tuni and Ankapalli in Andhra Pradesh and the 90-km-long Tambaram-Tindivanam project in Tamil Nadu involving a combined cost of Rs 745 crore are being funded on a debt-equity ratio of 3:1.
Both the four-lane highway projects will be implemented through two special purpose vehicles (SPVs) in which the GMR group would hold 74 per cent stake while the remaining 26 per cent equity is contributed by United Engineers Malaysia (UEM).
Apart from ICICI Bank, the lending consortium includes a host of public sector banks such as State Bank of India, Union Bank of India, Indian Overseas Bank, Jammu & Kashmir Bank, Bank of India, Punjab National Bank, Industrial Investment Bank of India and State Bank of Mysore.
The average spread of the loan ranges from 12.5 per cent to 12.75 per cent, according to Mr O.B. Raju, Managing Director of the two SPVs set up by the GMR group for implementing the projects.
The loan would have a period of 13.5 years including a construction period of 2.5 years, Mr Raju told Business Line.
The GMR consortium will build the road and maintain it for the concession period spanning 17.5 years (including a 2.5-year construction period).
The National Highways Authority of India (NHAI) will pay a fixed semi-annual annuity amount of Rs 29.48 crore and Rs 41.85 crore, respectively to the GMR group-UEM combine for the Tuni-Ankapalli and Tambaram-Tindivanam projects during the concession period.
The GMR group has set up two SPVs for building the highway projects GMR Tuni-Ankapalli Expressways Pvt. Ltd and GMR Tambaram-Tindivanam Expressways Pvt. Ltd.
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