Financial Daily from THE HINDU group of publications
Wednesday, Jul 23, 2003
Financial Daily from THE HINDU group of publications Wednesday, Jul 23, 2003 |
|
|
|
|
|
Home Page
-
Petroleum Corporate - Restructuring FIs approve debt recast of Essar Oil refinery project Our Bureau
Mumbai , July 22 LENDERS to Essar Oil's Vadinar refinery project have finally agreed to restructure the debt, paving the way for re-starting the work on the 12-million tonne refinery, which has been held up over the past four years. The lenders including IDBI, IFCI and ICICI Bank, at a meeting on Monday decided to revalidate the Rs 1,500-crore loan sanctioned earlier. The debt recast, according to sources, will reduce the interest rate on the existing loan by about 4 per cent. The lenders have also approved the revised cost estimate of the project at Rs 9,863 crore, which is higher by Rs 1,800 crore over the earlier estimate of Rs 8,000 crore. The refinery capacity has also been increased from 10.5 million tonnes to 12 million tonnes per annum. According to institutional sources, lenders have imposed a set of pre-conditions. These include the promoters providing personal guarantee and bringing additional equity to the tune of Rs 311 crore, and EPC contractors - ABB arranging Rs 905 crore, in addition to a deferred credit of $91 million. Besides, Essar Shipping, the group company, will have to provide a Rs 250-crore corporate guarantee. Essar Shipping is building the terminal, which is part of the refinery project to handle the crude and petroleum products. There will be a convertibility clause under which lenders will have the right to convert loans into equity up to 75 per cent of the total equity capital. According to sources, Essar Oil has recently sold its drilling division (rigs) for $60 million. Part of this money will be invested in the refinery project, sources said. The project, has achieved full financial closure. According to sources, UDHE and KBC Process Technologies Ltd, UK, the consultants appointed by institutional lenders have approved the revised cost estimate. Company officials said they are yet to get the details of the lenders' decision. However, they said the project is complete by 64 per cent and EPC contractors have agreed to finish the work in 24 months on re-start. The work on the project was discontinued in 1999.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|