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Srei Set To Get $10 Million Credit Line From Wb

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BUSINESS STANDARD
Last Updated : Jun 25 2001 | 12:00 AM IST

Srei International Finance Ltd, the Kolkata-based non-banking finance company (NBFC), which is into infrastructure equipment financing, is set to receive a fresh line of credit of $10 million (approximately Rs 47 crore) from the World Bank.

Srei director Sunil Kanoria told Business Standard: "Disbursement would begin in about a month. The interest on the line of credit is two per cent above Libor, currently pegged at 3.7 per cent."

The NBFC receives financial support from two other foreign financial institutions - FMO, a state-owned Dutch finance company, and DEG, a subsidiary of the German state-owned bank, KFW.

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World Bank, FMO and DEG together hold about 20 per cent stake in Srei. The two European finance companies normally lend to Srei at about 2.25-2.5 per cent above Libor.

Sunil Kanoria said the company has recently made a detailed presentation to the top brass of the Asian Development Bank (ADB) and was hoping to develop a close relationship with it. Financial assistance from the foreign institutions helps Srei raise funds at competitive costs.

Despite the recessionary trends in the industry, Srei's business appears to be unaffected. It already has a commitment of Rs 285 crore in the current fiscal, Srei managing director Hemant Kanoria said.

In the 2000-01 fiscal, Srei posted a gross income of Rs 205.92 crore, 38.65 per cent higher than the 1999-2000 fiscal. Gross profit rose by close to 10 per cent to Rs 15.35 crore, while net profit, at Rs 11.87 crore, was over 25 per cent higher. The company has declared a dividend of Rs 1.20 as against Rs 1 per share last year.

At the extraordinary general meeting on Saturday, the company got shareholders' approval to a resolution allowing it to increase the threshold limit on foreign holding to 49 per cent.

The company also got approval for its employee stock participation and stock option plans. In line with the recommendations of PricewaterhouseCoopers (PwC), Srei will form a trust that will buy up to 10 per cent of the company's paid-up equity from the open market and grant them to eligible employees free of cost.

In addition, the employees of the company would also receive shares through the stock option plan, for which they will have to pay a determined price.

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First Published: Jun 25 2001 | 12:00 AM IST

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