State Bank of India and Axis Bank are learnt to have refinanced Rs 4,700 crore debt of Hindalco for the Utkal alumina project.
The flagship company of the Aditya Birla Group managed to refinance the debt at an interest rate of 10.15 percent payable over an eight-year period.
At this rate, the company could save 300 basis points of interest compared to the the previous loan.
Scheduled to be commissioned in the second half of this year, Utkal is a 1.5-million-tonne refinery that will feed the company’s Mahan and Aditya smelters in Madhya Pradesh and Orissa, respectively.
Hindalco financed 70 percent of the Rs 7,009 crore crore Utkal project through debt.
Three years ago, the firm secured Rs 4,906 crore debt from a consortium of 28 public sector banks, including SBI, Punjab National Bank, Bank of Baroda and Canara Bank.
Interestingly, the banks had agreed to allow Hindalco to draw down the amount over a three-year period during the construction of the plant without any commitment fees.
This makes it the lowest pricing achieved by any corporate in India in recent times, amid unprecedented volatility.
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