Multi-modal integrated logistics solutions provider Sical Logistics yesterday announced financial closure for its greenfield iron ore terminal project at Ennore Port, with a Yes Bank-led consortium including United Bank of India, UCO Bank and India Infrastructure Finance Company Ltd agreeing to lend the company Rs.340 crores for the project.
Yes Bank is the lead manager and sole underwriter for the loan.
A special purpose vehicle, Sical Iron Ore Terminals Ltd, promoted by Sical Logistics with 89-per cent majority equity stake and Larsen & Toubro Infrastructure Development Projects Ltd., is undertaking the project. The project will be developed in two phases, and on completion, will have the capacity to handle 1.2 crores tons of ore annually.
The first phase, with half the total capacity, is expected to be operational in two years. Initially, it will be able to handle Panamax and Cape Sue vessels up to 150,000 metric tons deadweight, which after dredging, is expected to increase to include vessels of 250,000 metric tons deadweight.
The terminal is being developed on a build-operate-transfer (BOT), revenue-sharing contract with Ennore Port for 30 years including the construction period. Consequently, the concession period had already started effective 6th February this year. Hence, it is in the interest of the company to achieve infrastructure closure to the project as soon as possible.
Somak Ghosh, president (corporate finance and development banking) Yes Bank, stressed on the prime role played by his bank in the loan deal, right from delivering the major tranche of Rs.100 crores, to being the lead manager and sole underwriter for the entire Rs.340 crores. The loan comes with a tenor of twelve-and-a-half years, after an initial moratorium of two-and-a-half years for project construction.
V Ganesh, managing director, Sical Iron Ore Terminals Ltd., said that the project had been given a 10-year tax holiday and service tax exemption. Further, it had been given excise duty exemption during the project phase. He projected a return on investment of 18 per cent after tax, and expected the project to be in the black after five years.