Steel PSU: RINL plans to refinance long-term loans with SBI-led consortium banks
RINL initiates talks with SBI-led banks to restructure high-interest loans ahead of Rs 1,500 crore infusion, exploring 7% interest rates and Andhra Pradesh equity for power provision.
Steel PSU major, RINL (Rashtriya Ispat Nigam Ltd) ahead of its second financial infusion, of about Rs 1,500 crore due in April, has started a fresh round of talks with an SBI-led consortium of banks to restructure its high-interest bearing long-term loans.
Among the discussions is a suggestion for the Andhra Pradesh government to acquire corporate equity as a substitute for power provision. Against the present 9 percent interest bearing option, the steel-maker is looking for rates of "about 7 percent at par with industry," according to the sources.
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Better terms of repayment and a better line of credit—working capital—from banks are also under discussion. "Meeting planned between SBICAPS and APEPDCL to work out the modalities of equity infusion on account of power charges," the official said.
RINL obtained a Rs 11,000-crore rejuvenation package from the Cabinet earlier in January. Loans as on February 1 comprise Rs 187 crore to Union Bank, Rs 6,686 crore at almost 10.50% to IDBI, Rs 100 crore at 11% to PNB, Rs 5,655 crore to SBI at 10.70%, Rs 1,674 crore to Canara Bank at over 10% and Rs 1,55 crore to Indian Bank at 10%.
Read Also : Coal India Chairman Visits SECL Megaprojects, Reviews Production and Future PlansMinistry sources indicated that some older loans were as high as 14-15 percent interest, while others were serviced at 11-12 percent.
The banks agreed to bring interest rates down to 8.95 per cent in the first round but the pitch from RINL now is to refinance these loans at 7-7.5 per percent, at par with industry," the official said.
Running a 7.5 mtpa plant in Visakhapatnam with direct port access, the Steel Ministry has roped in investment banking SBI Cap to assemble a revival package for the alloy-maker.
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