Assam Petro firms up of debt component of upcoming petrochemical project

02-Sep-13

Assam Petrochemicals has achieved financial closure with the firming up of the debt component of its upcoming petrochemical project by raising Rs 635 crore of debt from a consortium of bankers led by the State Bank of India. The project has seen long delays. With this, the Assam state government-promoted project is likely to commission the country’s maiden gas-based petrochemical project by Q4-2016, as per DNA. With natural gas sourced from Oil India, Assam Industrial Development Corporation, a unit of the state government, has been implementing a 500 tonne a day (tpd) methanol and 200 TPD acetic acid project with an estimated project cost of Rs 1,028 crore at Namrup. The financing of the project was initially conceived with a debt equity ratio of 2.5:1 with a debt component of Rs 734 crore. Public sector oil and gas explorer Oil India proposes to acquire 49% stake at Rs 228 crore. Following this, the debt part was later brought down to Rs 635 crore or a debt-equity ratio of 1.6:1. SBI Capital Market was then given the mandate of syndicating the debt, which has now okayed raising a 14-year tenure loan. Assam Industrial Development Corporation will now hold 51% equity in the project.