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Indiaexportnews.com

Essar Ports re-finances its Rs. 405 crore debt through IIFCL

  21.09.2012    

Essar Ports has refinanced its debt in a subsidiary Essar Bulk Terminal Limited through take out finance scheme of India Infrastructure Finance Company Limited (IIFCL). Essar Ports has availed the take out finance scheme to reduce its interest rate by over two and half per cent on Rs 405 crore which is part of debt taken for building its 30 million tonne capacity bulk terminal at Hazira in Gujarat. 
Takeout finance of the infrastructure projects by IIFCL is the government initiative wherein an infrastructure project on commissioning can replace some of its costly domestic rupee debt with finances from IIFCL. This lowers the interest burden on infrastructure projects and facilitates incremental lending to infrastructure sector by freeing up the capital of banks. 
The company, which has a total debt of about a billion dollars could explore further availing the benefits of such a scheme for cutting the cost of its infrastructure project, Vadinar Port Terminal, a 12 million tonne all weather deep draft facility which is located in Gujarat. 
Speaking about the development, Mr. Shailesh Sawa - Director Finance, Essar Ports Limited said, “As part of our constant endeavour to reduce the cost of debt, we have availed government initiated scheme of take out finance. This will reduce our cost of debt and we will undertake more such initiatives to deliver better returns to our shareholders.” 
Earlier this year, Essar Ports entered into strategic alliance with Port of Antwerp receiving an equity infusion of Rs 175 crore at approx Rs 100 per share. The proceeds from this transaction was used to reduce the company’s debt. The company’s policy this year has been to reduce interest costs. For the quarter ended June 2012, Essar ports also reported 73% increase in the net profit after company handled highest ever cargo of 12.65 million tonnes during the quarter.


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