Infrastructure Leasing & Financial Services Ltd (IL&FS) has decided to replace Asian Development Bank (ADB) as a project participant for its Delhi-Noida bridge project. It has been replaced by American offshore funds such as Prudential Asia, Indian banks and financial institutions.
ADB was considering an investment of Rs 100 crore. It was to provide Rs 20 crore of equity and Rs 80 crore as debt.
But following India's nuclear tests there was significant processing delay by ADB. "ADB informed IL&FS that it will review the financing of the project in December which would further delay financial closure of the project. We informed it about our discussion with overseas funds for participation," Deepak Parekh, chairman of IL&FS, said. This was the rationale for revising the financial plan, he added.
According to the revised financial plan, ADB's Rs 20 crore equity will be replaced by equity contribution from Prudential Asia. The debt component of Rs 80 crore has been substituted by increased contributions from State Bank of India, Industrial Development Bank and Industrial Finance Corporation of India. They are expected to bring in an additional Rs 60 crore. Prudential Asia has also decided to contribute an additional Rs 20 crore apart from its equity as an 11-year subordinated loan.
The Noida Toll Bridge Company Ltd, the special purpose vehicle of the project, has also decided to come out with a retail deep discount bond issue of Rs 50 crore. The issue is eligible for tax exemption under Section 88 of Income Tax Act. The bond will carry a coupon in the range of 13.5-14 per cent. Infrastructure Development Finance Company (IDFC) and IL&FS will underwrite Rs 30 crore and Rs 20 crore respectively. The issue has been rated BBB+ by CARE.
The company has retained a take-out option at the end of fifth and ninth year. IDFC will also share a credit risk of Rs 35 crore for the project. With this, its commitment will be Rs 65 crore.
Meanwhile, Hudco is considering a loan support of Rs 25 crore. Support from SBI, IDBI and IFCI would go up to Rs 50 crore each.
The toll rates have been fixed at Rs 5 for two- and three-wheelers, Rs 10 for cars, Rs 30 for buses, and Rs 20 for trucks.
