The Hindu Business Line : IL&FS invites Exim Bank, HUDCO to pick stake in MiSEZ

IL&FS would invest Rs 20 crore in MiSEZ towards project development. It also plans to promote a real estate mutual fund that would participate in the equity capital of MiSEZ.

New Delhi , April 30

INFRASTRUCTURE Leasing & Financial Services Ltd (IL&FS), which is a co-developer and a financial advisor for the Maha Mumbai Integrated SEZ (MiSEZ), has invited Exim Bank and HUDCO to participate in the equity of MiSEZ.

The project cost for the first phase of MiSEZ is estimated at about Rs 4,900 crore. It is being financed with a debt-equity ratio of 2:1.

"We have spoken to Exim Bank and HUDCO to bring equity capital into MiSEZ. We hope they would agree. Their participation in the development of the project would change the colour and character of the project,"

Mr Ravi Parthasarathy, Vice-Chairman & Managing Director, IL&FS, told Business Line on the sidelines of a workshop on Economic Zones, organised by the International Finance Corporation (IFC).

He was hopeful that the equity closure for the MiSEZ would happen in six months and the debt closure would take place in the next three months.

On its part, IL&FS would invest Rs 20 crore in MiSEZ towards project development. It also plans to promote a real estate mutual fund that would participate in the equity capital of MiSEZ.

IL&FS has also decided to establish a three-year debt service reserve fund (DSRF) to provide comfort to the lenders on the interest payments. The DSRF would be created upfront and managed independently by IL&FS.

Mr Parthasarathy also held that the Basle II norms are in a way constraining the Banks from adopting a proactive approach in the financing of special economic zones (SEZs). "One of the issues is that banks would now be required to provide for NPAs if interest is overdue for more than 90 days," he pointed out.

IL&FS MD said that a public-private partnership was key requirement for development of SEZ in the country.

"All the SEZs in the country would have to be conceived at national level as you are creating a country within a country," Mr Parthasarathy said.

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