GMR ties up finance for AP road project

The Rs 471-crore Jadcharla-Farukhnagar road project in Andhra Pradesh, awarded to the GMR consortium comprising GMR Infrastructure and GMR Energy, has secured financial closure.

The capital cost of the project is being met by way of equity and debt in the ratio of 3:1. The debt component of Rs 353 crore has been tied up with Central Bank, Canara Bank, Bank of Baroda, Andhra Bank, Vijaya Bank and Bank of India, with ICICI Bank as the lead lender. The equity component is Rs 118 crore and the consortium has the option to bring in 5% of the project cost as subordinate debt in lieu of equity.

Though the total term debt requirement for the project is Rs 353 crore, the consortium received excess sanction of Rs 625 crore from the participating banks. The tenure for repayment of loan is 12 years with a moratorium of two years, according to a GMR release issued today.

The National Highways Authority of India (NHAI) invited bids last year for the improvement, operations and maintenance of the 71-kilometre stretch of road on the national highway number seven on a build, operate and transfer (BOT) basis for a concession period of two decades. GMR consortium won the bid and the concession agreement of the project was signed on February 20, 2006.