Sical Iron Ore Terminals has Rs.3.4 bn financial closureMarch 19th, 2008 - 7:05 pm ICT by admin
Chennai, March 19 (IANS) Sical Iron Ore Terminals Limited (SIOT) promoting the 12 million tonne per annum (tpa) iron ore terminal at Ennore Port here has achieved financial closure. The company, which is a 89:11 joint venture between Sical Logistics Limited and L&T Infrastructure Development Projects, signed the Rs.3.4 billion funding deal with a consortium of lenders led by Yes Bank Limited here Wednesday.
“The Rs.5.14 billion project will be implemented in two phases. The first would involve an outlay of Rs.3.9 billion - equity Rs.1.3 billion and debt Rs.2.6 billion. The project will have a debt:equity of 2:1,” V. Ganesh, managing director of SIOT, told the media.
“SIOT is building the iron ore terminal on build-operate-transfer (BOT) basis with 50 percent revenue sharing with Ennore Port Limited,” said Sudhir S. Rangnekar, managing director and Group CEO, Sical Logistics.
The 30-year contract is expected to generate 18 percent return on investment for SIOT.
Confident of completing the project’s first phase - capacity of 6 million tpa - under two years from now, Ganesh said: “The Rs.1.24 billion second phase would probably start two years after the first phase or four years from now. By that time the project would start generating around Rs.400 million and it would be better for us to draw the balance Rs.800 million loan.”
As to the current status of the project, he said orders for civil construction and machinery have been issued.
Civil works would involve Rs.1.12 billion and the machinery will cost around Rs.1.4 billion.
SIOT will be targeting iron ore mines located in the Bellary-Hospet belt in Karnataka.