Utilizing a finance scheme of India Infrastructure Finance Company Limited (IIFCL), Essar Ports said it has refinanced its subsidiary, Essar Bulk Terminal Limited, to the tune of INR 405 crore. IIFCL, a government initiative, particularly formed to develop the infrastructure, is, as its vision statement says, to “provide innovative financing solutions to promote and develop world class infrastructure in India”. Essar Ports has availed itself of the scheme called the take-out finance scheme by which the ports major can reduce the debt burden by two-and –half percent on INR 405 crore; it is just a part of the debt incurred for building its 30 million tonnes capacity bulk terminal at Hazira in Gujarat. Take-out finance, a government-backed scheme, is handled by IIFCL and an infrastructure project on being commissioned can get finance from IIFCL to replace its costly domestic rupee debt, thus reducing its interest burden. Mr.Shailesh Sawa, Director, Finance, Essar Ports said in a statement: “As part of our constant endeavour to reduce the cost of debt, we have availed the Government initiated scheme of take-out finance. This will reduce our cost of debt and we will undertake more such initiatives to deliver better returns to our stakeholders”. In keeping with the company’s policy of reducing the cost of the interest, earlier, it entered into an alliance with the Port of Antwerp, getting an equity infusion of INR 175 crore. The proceeds from this transaction were utilized to reduce the company’s debt.
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