The Hindu Business Line : GMDC renegotiates loan for power project

STATE-OWNED Gujarat Mineral Development Corporation (GMDC) has renegotiated a term loan of Rs 1,116 crore taken four years ago and has brought down the rate of interest from 12 per cent to 7 per cent.

"The term loan was taken in the year 2000-01, when the debt market was riding high. A rate of average 12 per cent was fixed with a consortium of banks and financial institutions that included IDBI and State Bank of India. With the softening of interest rates recently, we have managed to rope in Power Finance Corporation to take over the entire amount of loan at 7 per cent," a senior company official told Business Line on Saturday. The debt restructuring exercise would lead to a saving of as much as Rs 53 crore in the first year of operation and Rs 283 over the entire 10-year repayment period. In addition, it will shave off nearly 14 per cent from the power tariff from the plant, the official said. The loan pertains to a 250-mega watt (MW) lignite-based power plant being constructed by GMDC at Akrimota in Kutch district of Gujarat. The project is already in an advanced stage of implementation and the first unit of 125 MW would be commissioned by January, 2005.