Cross-border deals to fetch $300m more
Raghu Mohan
MUMBAI, January 9: Three cross-border financing transactions will be sewed up within a fortnight, notwithstanding the turbulence in the international markets and gloomy forecasts by Moody's Investors Service. These include a $50 million Maharashtra State Electricity Board (MSEB) loan, the $70 million Tata-Bell Canada offering and a $100 million borrowing by Exim Bank.According to investment bankers here, the State Bank of India (SBI) has committed to take $25 million of MSEB's $50 million external commercial borrowing (ECB) on its books. Bank of India (BoI) will take about $10 million. It is learnt that only a small portion -- about $5 million -- of the $50 million MSEB loan is to be tied up to close the deal. MSEB's seven-year, $50 million ECB is being contracted at 75 basis points over Libor. Loan-proceeds are to be used to fund MSEB's subscription to a 30 per cent stake offered to the state utility in the Dabhol Power Company (DPC). MSEB's international loan offering is being lead-managed by Societe
Generale. On the telecom side, the $70 million Tata-Bell Canada loan will close shortly. The loan, lead-managed by the Bank of America-Toronto Dominion Bank combine, is awaiting commitments to the extent of about $5 million. The cellular operators eight-year facility is expected to be priced at around 200 basis point over Libor. Tata-Bell Canada has the mandate for the Andhra circle. Tata Tele Services Ltd is the basic services operator while Tata Communications Ltd is the cellular operator. The debt-component of the cellular venture is $112.5 million (nearly Rs 400 crore). The remainder rupee portion ($42 million) has been picked by the Industrial Development Bank of India (IDBI). The financial institution cleared the exposure at a meeting held on September 29. Meanwhile, Exim Bank is also set to tie up a four-year, $100 million loan from the international markets. The Exim Bank loan is being lead-managed and underwritten by National Australia Bank and Sumitomo Bank, Hongkong. Sources say that
the underwriters will take the entire loan on their books. The loan agreement will be signed in the first two weeks of February. Cross-border finances amounting to $5,185.36 billion were secured in 59 transactions concluded between January 1, 1997 and November 30, 1997. This figure will now swell by around $300 million with the inclusion of the following loans: Tisco's $85million (concluded in December'97), Tata-Bell Canada's $70 million, MSEB's $50 million and Exim Bank's $100 million offerings.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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