The Hindu Business Line : Jindal Steel to revamp foreign loan portfolio

Sponge iron maker Jindal Steel & Power Ltd (JSPL) is restructuring its foreign loan portfolio by refinancing its external commercial borrowings (ECB) of $75 million made in 2004. The company is currently paying an effective 7.1 per cent annual interest on this 5-year borrowing that would get reduced to 6.2 per cent annually post refinancing.

Company sources said that this would lead to a savings of Rs 3 crore annually in interest outgo.

"We are in the market for refinancing the external commercial borrowing issue," the Director (Finance) of the company, Mr Sushil Maroo, told Business Line.

The refinance issue has opened last week and is likely to be completed by month-end. "We have already got overwhelming response and have received offers worth more than $100 million. But it will take time because of completing the formalities," he said.

The 2004 ECB was the first overseas loan of JSPL. It went in for another round of ECBs in 2005 borrowing another $75 million. The first ECB is being refinanced roughly after one and a half years though the maturity period was five years, officials said.

The arrangers of the issue are ICICI Bank (Singapore) and ING Vysya, Mr Maroo said.

El Mutun mines

Meanwhile, the company's plan to acquire the El Mutun iron ore mines in Bolivia is suddenly faced with uncertainty following recent moves by Bolivian Government to nationalise the country's petrol and gas sectors. The El Mutun mines are one of the largest iron ore mines in the world containing around 40 billion tonnes of ore reserves.

Since iron ore is already under Bolivian Government control, the Jindals are not sure about the future course to follow. However, a team of company officials may go to Bolivia soon, officials indicated.

More Stories on : Restructuring | Steel | Overseas Borrowings

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