The Infrastructure Development Finance Company (IDFC) has extended a bridge loan of Rs 100 crore to the Rs 2,500 crore liquefied natural gas (LNG) import terminal project of Petronet LNG at Dahej in Gujarat. The loan carries a coupon rate of 11.40 per cent per annum.
Sources said, "Our exposure to the LNG project, which has a debt-equity ratio of 7:3, is only by way of bridge loan with tenor of under one year. The loan that was recently given is temporary and is availed of to fill in the transition from construction loan to permanent loan."
Typically, in infrastructure projects, the lender advances funds for the material and labour as certain stages of the construction get completed.
When the loan matures, the lender expects the project to be completed and full amount of the loan to be repaid in a lump sum.
In case, if the project doesn't start to get the income, the borrower usually resorts to a bridge loan to repay the construction loan.
Sources said Petronet had already taken bridge loans amounting to Rs 1,300 crore from seven banks, which, among others, include: Oriental Bank of Commerce, Allahabad Bank, Indian Overseas Bank, and financial institutions. They added that the bridge loans would enable a major portion of the project to be completed.
The project is likely to achieve financial closure by the end of this financial year and the bridge loans will be pre-paid once it gets long-term finances.
Petronet LNG is also setting up a 2.5 million tonne LNG terminal project at Kochi. The company has been floated by Indian Oil Corporation, Bharat Petroleum Corporation Ltd, Oil and Natural Gas Corporation and Gas Authority of India for import of LNG.
The four promoters hold 12.5 per cent stake each in the company, while banks and financial institutions --which include multi-lateral institutions -- and Gujarat government will be offered a total of 20 per cent stake.
