SBI Caps arranging another $667m for GSPL

Vol 15, PW 21 (03 May 12) People & Policy

GSPC’s increasing debt burden is ringing alarm bells in the Gujarat government but its subsidiary Gujarat State Petronet has turned to SBI Caps once again to raise Rs 3500cr ($667m) from banks.

BSE-listed GSPL urgently needs finance for its proposed 1611-km gas pipeline from Mallavaram in Andhra Pradesh to Bhilwara in Rajasthan, estimated to cost Rs5214cr ($993m). “SBI has begun arranging long-term ‘rupee facility’ finance for the Mallavaram to Bhilwara pipeline,” confirms GSPC.

“We’re confident there will be a good response. When we last approached the banks in January they happily sanctioned loans exceeding our requirement.

” GSPL is also preparing to construct a 1688-km pipeline from Mehsana in Gujarat to Bhatinda in Punjab and a 512-km pipeline from Bhatinda to Srinagar, passing through Jammu. On January 30, SBI Caps raised Rs4516cr ($860m) for these two projects from a consortium of 12 state-owned banks, led by Bank of India.

Among them were Bank of Baroda, Allahabad Bank, Union Bank of India, Oriental Bank of Commerce, Punjab & Sind Bank, Canara Bank, Corporation Bank, Punjab National Bank, UCO Bank and Vijaya Bank. Separately, GSPL has gone ahead and set up companies to implement the three pipeline projects, together needing Rs12,500cr ($2.38bn) CAPEX.

GSPL India Gasnet (GIGL) will construct the 42-inch diameter Mehsana to Bhatinda pipeline, with a 30m cm/d capacity and also the 15m cm/d capacity Bhatinda to Srinagar pipeline, with 24 and 28-inch diameters. GSPL India Transco (GITL) will lay the 42-inch diameter pipeline from coastal Mallavaram village in Andhra Pradesh to Bhilwara city in Rajasthan, with a 50m cm/d capacity.

On May 1, GSPL (52%) signed a JV agreement with partners IndianOil (26%), Hindustan Petroleum (11%) and Bharat Petroleum (11%) to lay the three pipelines.