Mumbai: Essar Ports today announced that it has refinanced its debt in a subsidiary Essar Bulk Terminal Limited Hazira through a takeout finance scheme of India Infrastructure Finance Company Limited (IIFCL). Essar Ports has availed the takeout 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.
The takeout finance scheme by IIFCL for infrastructure projects, is a 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 the infrastructure sector by freeing up the capital of banks.
The company, which has a total debt of about a billion dollars, could further explore 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 endeavor to reduce the cost of debt, we have availed the government initiated scheme of takeout 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 a 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 net profit after the company handled its highest ever cargo of 12.65 million tonnes during the quarter.
About Essar Ports
Essar Ports Ltd is one of the largest port companies in India, with a current capacity of 88 MMTPA. The capacity is being expanded to 158 MMTPA over the next few years.
Essar Ports has two operational ports, at Hazira and Vadinar, in Gujarat. The Hazira port is an all-weather, deep-draft port with 30 MMTPA of dry bulk and break bulk cargo handling capacity. Vadinar is also an all-weather, deep-draft port with 58 MMTPA of liquid cargo handling capacity.
Essar Ports is currently developing two terminals at Paradip, Odisha, comprising an iron ore berth of 16 MMTPA and a coal berth of 14 MMTPA. The company is also setting up a dry bulk terminal at Salaya, Gujarat, with a capacity of 20 MMTPA. Additionally, the company plans to expand its Hazira port capacity by 20 MMTPA taking its capacity to 50 MMTPA.
About Essar
Essar is a multinational conglomerate and a leading player in the sectors of Steel, Energy, Infrastructure and Services. With operations in more than 25 countries across five continents, the Group employs 75,000 people, with revenues of US$ 27 billion.
For Media Queries
Jatin Aggarwal, DGM - Corporate Communications, Essar
Phone: +91 9930136303, Email: jatin.aggarwal@essar.com
