Economic Times, 31 Mar, 2009
Economic Times, 31 Mar, 2009
CHENNAI: Sanmar group with interests in chemicals, engineering, metals, shipping and speciality chemicals, has said TCI Sanmar Chemicals LLC achieved financial closure on March 30 for its $ 868 million VCM\PVC project at Port Said in Egypt.
Chemplast Sanmar MD and TCI Sanmar Chemicals Chairman, P S Jayaraman said the landmark financing transaction is the the first substantial international project loan which is wholly financed by Indian banks. It showed their confidence in the management strengths of Sanmar and the future prospects of chemical business, he added.
The syndicate consists of State Bank of India, Bank of India, ICICI Bank, Indian Overseas Bank, Axis Bank, Export-Import bank of India, Bank of Baroda, Indian Bank, Syndicate Bank and Union Bank of India.
SBI, Baharain Branch also acts as facility agent, offshore account and offshore security agent. These banks have together provided a long term loan facility of $ 565 Million. Arab International Bank is providing a separate $ 70 Million working capital facility and acts as onshore security agent and onshore account bank.
Jayaraman said the balance cost of the project would be funded by equity and internal accruals. The ongoing project of TCI Chemicals was acquired by Sanmar group in early 2007 against competition from global players. It is now producing 10,000 tonnes per month of caustic soda for the domestic market.
After the acquisition, the Sanmar group has embarked on major investments. TCI's world scale production facilities will be Egypt's largest chlor-alkali plant with a VCM capacity of four lakh tonnes per annum, half of which will be converted into downstream PVC ( two lakh tonnes per annum) for sale in the local and regional markets.
Plus, caustic soda production capacity will be more than doubled to 2.75 lakh tonnes. The term loan repayment will start after the facilities come on stream by early 2010.
Sanmar group Chairman N Sankar said, " The fact the banks have been able to close this deal in the difficult financial situation prevailing in the wake of the global melt down, reflects their inherent strength and their confidence in Indian business in general and the Sanmar group and its management in particular. The group has enjoyed excellent long-term relationships with most of these banks, in some cases, for over four decades".
Once the facilities come on stream, Sanmar group will be one of the significant global players in PVC, he said