CESC to tap Hudco for Rs 600 crore

CESC Ltd, the RPG Group power utility, will tap Housing and Urban Development Corporation Ltd (Hudco) for a Rs 600 crore term loan that will be used to retire high-cost debt taken from IDBI.

Sources close to the development said that CESC was looking for avenues to swap its high interest cost debts which, after the recent debt recast at the Corporate Debt Restructuring had come down to 13.5 per cent on an average, from 16 per cent.

The company has entered into talks with a number of financial institutions and banks for reducing it average interest rate to around nine per cent.

"The recast package provides us the option of retiring our high cost debts which, after the CDR package has declined to 13.5 per cent "" but given the prevailing rate of interest in the market, even a 13.5 per cent was considered on the higher side. Hence we are looking for avenues to bring down our cost of funds to the level of nine per cent," explained Sumantra Banerjee, managing director, CESC Ltd.

Sources also said, CESC was specifically looking for ways and means of retiring its entire debt which it availed from erstwhile, ICICI Ltd and IDBI.