The Hindu Business Line : Ennore Port iron ore terminal achieves financial closure

New facility: Mr Somak Ghosh (left), President, Corporate Finance and Development Banking, Yes Bank, and Mr Sudhir Rangnekar, Managing Director and Group CEO, Sical, at a press conference in Chennai on Wednesday.

Our Bureau

Chennai, March 19

The Rs 514-crore greenfield iron ore terminal project at Ennore Port, jointly promoted by Sical Logistics and L&T Infrastructure Development Project, has achieved financial closure. A consortium of lenders, led by Yes Bank, will loan Rs 340 crore to the project.

The total cost of the project is spread over two phases, funded at a debt equity mix of 2:1.

The project will be put up by a special purpose vehicle (SPV), Sical Iron Ore Terminals Ltd, with Sical Logistics having an 89 per cent equity stake and L&T Development having the balance equity, Mr Sudhir Rangnekar, Managing Director and Group CEO, Sical Logistics, told newspersons.

The first phase of the project with an annual capacity to handle around six million tonne of iron ore will be ready in 24 months. The project is being developed on a 30-year build, operate and transfer basis. Half of the revenues will be shared with the Ennore Port.

Besides Yes Bank, which brought Rs 100 crore as its share of the loan amount, the consortium members are United Bank of India, UCO Bank and India Infrastructure Finance Company. The zero date for the concession period commenced on February 6, he said.

First phase

The first phase of the project will involve an investment of Rs 390 crore to handle annually around six million tonne of iron ore. The rest of the investment (of Rs 124 crore) will take place in the second phase and will double the terminal’s capacity in three years, said Mr V. Ganesh, Managing Director, Sical Iron Ore Terminals.

With a draft of 18 metre, the terminal will handle Panamax and Cape size vessels up to 150,000 DWT (dead weight tonne), and at a later stage handle Super Cape size vessels.

If dredged to 22 metre, the terminal can handle vessels of 250,000 DWT in size. Initially, the terminal will have a stockpile area to store around 1.20 million tonne of iron ore, and eventually will have double the capacity, he said.

Mr Ganesh said the project would start giving returns in five to six years. With a 10-year tax holiday, he expects the return on investment to be around 18 per cent, post tax.

The loan would carry a prime lending rate-linked interest rate of around 12 per cent.

According to Mr Somak Ghosh, President (Corporate Finance and Development Banking), Yes Bank, the loan will carry a moratorium of two-and-a-half years during the project construction stage.

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