Banks queue up to lend Swan up to Rs4000cr

Vol 19, PW 2 (24 Sep 15) Midstream & Downstream

If you're an Indian bank with money to spare expect to receive a final Information Memorandum (IM) from merchant banker SBI Caps amid renewed hopes Swan Energy's proposed 5m t/y FSRU at Jafrabad in Gujarat will materialise.

Swan needs to borrow Rs3700cr ($616m) to reach financial closure for this project. In July SBI Caps received an overwhelming response to its first IM sent to 20 Indian banks, mostly state-owned, to gauge the level of interest and depth of the market.

“We received offers adding up to more than Rs4000cr ($666m) for more than 10 years, at an interest rate of base plus between 3% and 3.5%,” confirms a senior Swan source. Swan initially planned to take a mix of rupee and US dollar loans but given the good response from Indian banks it will now take just rupee loans.

Swan clarifies that not all the 20 banks will be in the SBI-led consortium. “Now we know there is definite interest (among banks) we can pick and choose,” we hear.

Swan wants to complete financial closure by end-December with plans to begin drawing the loan from March 2016 after it has fulfilled conditions like awarding the EPC contract, signing the shareholder or promoters agreement and attracting promoter equity. IndianOil and GSPC have booked 1m t/y and 1.5m t/y respectively in the proposed FSRU.

LNG Summit