World Street Journal, Feb 19, 2010
By BIJOU GEORGE
MUMBAI -- India's Vedanta Aluminium Ltd. aims to raise 171 billion rupees ($3.68n billion) via a syndicated loan, a person familiar with the matter said Friday, in what bankers peg as one of the biggest loan syndication deals in the South Asian nation in a year.
The unlisted arm of Vedanta Resources PLC plans to raise the funds through a 10-year loan at an interest rate of 11.25%, the person told Dow Jones Newswires.
The company won't make interest payments for the first three years, and the loan is likely to be finalized by March, the person added.
The aluminum maker plans to use the funds for expanding its projects in the eastern Indian state of Orissa, the person said, without elaborating.
Vedanta plans to invest $2.5 billion for a bauxite mine project at Niyamgiri hills in Orissa to feed its alumina refinery at Lanjigarh. The company is also expanding the Lanjigarh refinery.
The company couldn't be reached for comments.
Bankers said the Vedanta deal may herald more big-ticket deals in the days to come, as companies gear up to participate in the revamping of India's creaking infrastructure.
India forecasts an investment requirement of $514 billion to plug the gaping holes in its infrastructure in the five years through March 2012.
"The demand for credit for big-ticket projects is massive. A large power project could easily require this sort of money, and there are a lot of power and road projects looking for financial closure," said an investment banker who asked not to be named.
Earlier Friday, another person familiar with the matter said India's HPCL-Mittal Energy Ltd. and HPCL-Mittal Pipelines Ltd. aim to raise $200 million each via overseas loans.
The unlisted companies, joint ventures between Hindustan Petroleum Corp. and Mittal Energy Investment Pte. Ltd., plan to raise the funds via 10-year, dollar-denominated loans, the second person told Dow Jones Newswires.
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