The Hindu Business Line : Ashok Leyland raises $200 m ECB loan

Chennai, March 26 Leading commercial vehicle manufacturer, Ashok Leyland Ltd has recently concluded an External Commercial Borrowing (ECB) programme of $200 million (Rs 800 crore).

A press release from the company said this was the largest-ever loan taken by Ashok Leyland in a single transaction till date.

The company has broad based its relationships, with the facility being subscribed to by several banks, including the leading foreign banks.

The Chief Financial Officer, Mr K. Sridharan, said, “this deal is significant for the company in many ways. Meant to meet the company’s funding requirements, the deal got successfully completed at a time when the global financial markets are in turmoil. Secondly, it has been concluded at very competitive rate.”

Funding expansion

The loan would partly fund the requirements of the company to meet its expansion plans and overseas investments, the release said.

As per the guidelines of the RBI, companies can use the proceeds of ECB only for meeting forex requirements for capital expenditure and other overseas investment purposes.

Accordingly, the RBI has given a go ahead to the company to proceed with the draw down.

The funds would be drawn over the permitted period and Ashok Leyland would take necessary hedging measures to protect it from the vagaries of exchange markets, the release added.

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