Comments
The $2-billion loan syndication from a clutch of Chinese banks led by China Development Bank will enable Lanco Infratech Ltd to achieve financial closure for two thermal power projects of 1320 MW each at Anpara and Himavat.
“The diversified infrastructure company has signed a memorandum of understanding for the debt component with the Chinese banks. This will enable the company to close the necessary finances for the two power projects,” Sharad Jhingan, Chief Operating Officer and Head-Structured Finance, Lanco Infratech, said.
Sharad Jhingan told Business Line , "This is a major boost for the company and takes care of 70-75 per cent of the debt component for the two thermal power projects. The rest will be met through equity infusion."
Asked about the reason for tapping external commercial borrowings from Chinese banks, Sharad Jhingan said Lanco has had strong linkages with Chinese equipment suppliers and critical plant equipment is sourced from them. The Chinese banks that support these equipment suppliers would be comfortable securing their funds. Lanco would have a diversified fund option.”
“Indian banks have hit the sector cap on lending to power projects. They have also hit a cap on the amount they can lend to Lanco for the time being. Therefore, it is beneficial for Lanco and Chinese companies to enter such a transaction," he said. Lanco has sourced equipment from Harbin and Dong Fang among others.
“Interests are definitely lower but it is not possible to fix a number to it as it varies from time to time and depends on when we access funds. While we have signed for the debt, we will access funds as and when required and in accordance with the RBI guidelines for such loans,” he said.
The CDB will lend Lanco about 30 per cent of the $2-billion and the rest arranged through other banks and financial institutions.
On the company’s move to infuse equity into the company and reduce debt, he said the process is underway and negotiations for equity infusion are on.
rishikumar.vundi@thehindu.co.in
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.