Essar Ports has approached the Reserve Bank of India (RBI) to allow the company as a special case to raise around Rs 1,500 crore through external commercial borrowing (ECB) route to part refinance its Rs 3,645 crore loan.
Shailesh Sawa, CFO, Essar Ports said that the company has made an application to the central bank in this regard as the bank eased certain rules for ECB. RBI recently allowed manufacturing and infrastructure companies to avail ECBs to repay their rupee loans if the companies have been a consistent foreign exchange earner for the last three years. Essar Ports does not earn its revenues in foreign currency and that is why the company has made a special appeal to the bank for the nod.
Essar Ports availed of the Take Out Financing scheme of the government through IIFCL and refinances Rs 405 crore of its debt for the Hazira port facility. This has brought down its interest cost by 2.7% for the stated amount.
The total debt on Essar Ports books as on September 30, 2012 was Rs 5,601 crore out of which Rs 3,645 crore is the operating debt and rest Rs 1,957 crore constitutes project financing.
The current average interest rate for the company is 12-13%.
It is also looking to refinance Rs 200-250 crore debt at its Vadinar terminal through the Take Out financing route.
Essar Ports is undergoing a massive expansion plan aims to reach 158 million tonne per year capacity by 2014-15.
Currently, the company has a total capacity of 88 million tonne and capacity utilisation of 60%. Merely 4% of its revenues came from third party cargo in the first half of the current fiscal which the company looks to scale up to 25% by 2014-15.
Declaring its second quarter ended September 30, 2012 results, Essar Ports said that its profits jumped 97%, to Rs 80.53 crore. Its revenues, too, saw an increase of 25%, to Rs 348.29 crore as against Rs 279.14 crore for the same quarter last year.
Its earnings before interest, tax, depreciation and ammortisation (EBITDA) margins stood at 82% for the quarter. EBITDA for the quarter was at Rs 287.1 crore, up by 24%.
Rajiv Agarwal, managing director, Essar Ports said that the increase in revenues has been due to the ramp of capacities in group companies like Essar Steel and Essar Oil.