Jindal Steel raises Rs 660 cr bridge loan, stock dips 2.5%

The loan proceeds will be used fund the CIC Energy acquisition

Jindal Steel and Power (JSPL) has dipped nearly 2.5% on the Bombay Stock Exchange (BSE) in early deals on reports that the company has raised a bridge loan of Rs 660 crore to fund its CIC Energy acquisition.

The company raised Rs 550 crore from Deutsche Bank and Rs 110 crore from First Rand Bank of South Africa for one year term. Bridge loans are short term financing which the companies go for to fund any immediate need of money. These loans are then replaced by longer term borrowings.

The loan has been raised at 1.9 per cent over LIBOR. The company said, “this is the most competitive rate given the current market scenario." Earlier this month, Jindal Steel said that it has acquired CIC Energy for Rs 600 crore through its subsidiary Jindal BVI Ltd (JBVI). JBVI and CIC Energy will now be merged and CIC will be delisted from the Canadian stock market.

The stock opened at Rs 446.50 and touched a low of 432.70 on the BSE. A total of 15,67,437 have already changed hands in opening deals.