GMDC restructures term loan

First unit to be commissioned by january 2005

The Gujarat Mineral Development Corporation Ltd (GMDC), which is setting up a 250 MW lignite-based power project at Akrimota in Kutch district, has restructured its term loan on Saturday.

The project is financed through internal accruals and a term loan of Rs 1,116 crore.

The term loan was negotiated way back in 2000-01 and a rate of average 12 per cent was fixed with a consortium of banks and institutions for the entire amount of loan.

According to a company release issued here, "Taking advantage of softening rates in last few months, the Corporation intensified its negotiations with existing and new banks and financial institutions and finally, the Power Finance Corporation (PFC) offered to take up the entire amount of debt at drastically reduced rates, resulting in a reduction of nearly 5 per cent from original interest rates.

"The restructuring exercise has given rise to an estimated saving of as much as Rs 53 crore in the first year of operation and total saving of Rs 283 crore over the repayment period of 10 years," the company release added.

More importantly, this will also shave off nearly 14 per cent from the estimated tariff.

The 250 MW lignite-based power project, which is now in advanced stage of implementation, will start generating power from the first unit of 125 MW by January, next year and the Corporation officials believe that once commissioned, the power project would nearly double the turnover of Gujarat Mineral Development Corporation Ltd while increasing its Profit After Tax (PAT) by nearly 70 percent without any external equity infusion into the Company.

GMDC's Akrimota project is expected to generate low cost electricity at Rs 2.30 per unit.