Business

Ennore iron ore terminal project achieves financial closure

— PHOTO: BIJOY GHOSH

GREENFIELD PROJECT: Somak Ghosh (left), President, Corporate Finance and Development Banking, Yes Bank, with Sudhir Rangnekar, Managing Director and Group CEO, Sical, addressing a press conference in Chennai on Wednesday.

CHENNAI: The greenfield iron ore terminal project at Ennore Port, jointly promoted by Sical Logistics and L&T Infrastructure Development Project Ltd., has achieved financial closure with the Yes Bank-led consortium initialling an agreement with the promoters for a loan of Rs. 340 crore.

The terminal will come up in two phases and will have a capacity to handle 12 million tonnes of iron ore throughput annually.

The project will be implemented on a BOT (build, operate and transfer) basis, with a concession period of 30 years. The zero date for the concession period has already commenced on February 6. The project will have a debt-equity ratio of 2:1. Besides Yes Bank, the lending consortium comprises United Bank of India, UCO Bank and India Infrastructure Finance Company Ltd.

The project will be implemented through a special purpose vehicle — Sical Iron Ore Terminals Ltd. While Sical Logistics will hold 89 per cent equity in the SPV, L&T Infrastructure Development Projects will hold the balance.

Somak Ghosh, President (Corporate Finance and Development Banking), Yes Bank, said the loan would carry a moratorium of two-and-a-half years during the project construction stage. Thereon, it would have a tenor of twelve-and-a-half years. Yes Bank’s share of the loan component would be Rs. 100 crore. The other members of the consortium would share the balance, he added.

Addressing a press conference here on Wednesday, V. Ganesh, Managing Director of Sical Iron Ore Terminals, said the loan would carry a PLR (prime lending rate)-linked interest rate, which would work out to around 11-12 per cent. Mr. Ganesh said the project had been given a 10-year tax holiday and service tax exemption. Further, it had been given excise duty exemption during the project phase. He expected the first phase to go on stream inside 24 months. The two-phase project would involve a total investment of Rs. 514 crore. Phase-I would have a capacity of six million tonnes throughput annually and involve an outlay of Rs. 390 crore, he added.

The terminal, Mr. Ganesh said, would have a revenue sharing contract with Ennore Port during the concession period. It would have a stockpile area that could store 1.28 million tonnes of iron ore initially and 2.4 million tonnes eventually.

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