Balaji Infra Projects Ltd-owned Dighi Port has been referred to the corporate debt restructuring process to recast loans worth Rs 800 crore.
The interest rate, which was initially about 10.25 per cent, now stands at 14.74 per cent. The principal bankers include Bank of India, Canara Bank, Dena bank and Indian Overseas Bank. In May, rating agency CARE had upgraded the company’s long-term credit facilities from BB+ to BBB+. In 2009-10, the port’s jetty accounted for revenue of Rs 2.88 crore, compared with Rs 1.87 crore in 2008-09, according to CARE data.
Vijay G Kalantri, chairman and managing director, Balaji Infra Projects, said Dighi Port was in talks to restructure its debt at better interest rates and repayment duration. The recast is for the Rs 800-crore loan it had tied up earlier for its expansion plan. The company has already spent Rs 1,300 crore and has the capacity to handle five million tonne of cargo. The loan on its books for the Rs 1,300 crore already spent is Rs 624 crore.
Kalantri said there were logistical concerns at the port. These include deficient rail and road services, which was hampering the ramping up of capacity. “With a total capacity of five million tonne, we did a little over a million tonne last year because of logistics issues,” he said, adding the port would have dry bulk, as well as liquid cargo handling capacities and had already tied up with Indian Molasses Company for this.
Kalantri said another Rs 1,200 crore was being invested, and this would raise the capacity to 15 million tonnes. The debt-to-equity ratio for the expansion is 7:3 and the company has already tied up the debt (Rs 840 crore) for the expansion from a number of Indian banks. However, the constant rise in interest rates had troubled the company, and it had now sought restructuring of the debt from banks. The interest burden rose, owing to an increase in lending rates by banks. The Reserve Bank of India had raised policy rates to fight inflation.
The company is also eyeing foreign direct investment (FDI) to draw money for the port’s expansion plans and solve its high-debt issues. “We are in talks with some companies. Let’s see how this turns out,” Kalantri said, adding the debt offloaded would be up to 26 per cent. The FDI investment the company is eyeing could be used to lower the debt and help in the expansion.
