Please Fill Up Your Company Details And Your Designation

Update Your Profile
 
Your email ID :  
     
Password :  
     
          
New user? Create an account               Forgot password?
     
 

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Industrial Products India, Industrial Manufacturers & Suppliers
 




 
   
 
 
 

Jindal Steel raises Rs 2,137 cr....

Jindal Steel raises Rs 2,137 crore for expansion in Oman

Jindal Steel & Power, a steel maker and power generator, has raised $475 million (about 2,137 crore) through the takeout financing route, to part finance expansion plans overseas, making it one of the largest such transactions by an Indian company.
The Delhi-based company, which is part of the OP Jindal group, has raised the loan at 225 basis points over the Libor, for a tenor of five years, with 10 large banks participating in the transaction. The banks include Standard Chartered, DBS, Citibank, Bank of Tokyo Mitsubishi, Mizuho, Barclays, RBS, ANZ, Credit Agricole and JP Morgan.
"It is good loan for a five-year tenor and will be used to finance our expansion programme at Shadeed Iron & Steel at Oman," finance director Sushil Maroo said.
Takeout financing typically provides finance for longer duration projects of about 15 years, by banks that sanction loans for the medium term, for 5 to 7 years. The loan will be taken out of books of the financing bank, within a pre-fixed period by another institution, thus preventing any possible asset-liability mismatch. After taking out the loan, the institution offloads it to another bank or keeps it.
These long tenure loans were primarily introduced to offer sops to banks to lend to the infrastructure sector as banks earlier had very little exposure to long term loans, and also did not have adequate resources of similar tenure to create long term assets.
"Companies opt for takeout financing to ensure a better match between the type of asset and best suited liability structure for that asset," said Chetan Savla, senior executive director and head of corporate advisory group at Kotak Investment Banking.
Jindal Steel acquired Shadeed Iron and Steel in May 2010 from Abu-Dhabi's Al Ghaith Holdings for $464 million and had also indicated that it would invest about $500 million to expand Shadeed's facilities. The capacity will be expanded from 1.5-million-tonne to about 5-million-tonne by 2015-16. The main reason for acquiring Shadeed was easy availability of gas. The acquisition is a key move in the international strategic expansion for Jindal Steel.
"Integration is also easy for Shadeed as the plant can get crucial pellets from India and also from Bolivia," said Mr Maroo. Currently, Jindal Steel has an annual capacity of 3 million tonnes in Chhattisgarh, which is proposed to be doubled at about 10,000 crore. The company is also investing an estimating 44,000 crore on two new plants in Orissa and Jharkhand.

However there are no major borrowing plans in India. "We don't go for large borrowings as we keep meeting our requirments in small doses," the finance director said, explaining the company's finance strategy.

 
     
 
   
      More...
 
 
 
     
 
 
     


 
 
FORUM  
Are Indian Brands
Globally competitive
    
   
 
 
 
 
     
   
More >>