Goa port ties up with private developer for coal handling berth

Goa’s Mormugao Port Trust (MPT) has entered
into a partnership agreement with Adani Mormugao
Port Terminal to develop a mechanised coal handling
berth in the port premises, a top official said here Tuesday.

As per the deal, Adani Mormugao, a special purpose
vehicle (SPV) floated by a consortium of Adani
Enterprises and Mundra Port and Special Economic
Zone, will invest around Rs.250 crore in the project
and operate it for 30 years, MPT chairman
Pravin Agarwal told reporters.

“It is a 30-year concession.
We are presently handling imports
of 5.5 million tonnes of coal annually.
Once the mechanised berth is ready,
we will be able to double the capacity,”
Agarwal said.

As per the concession agreement,
MPT will get 20 percent of the revenue
earned by the private partner, he added.

“Once fully operational, MPT expects
to earn about Rs.40 crore as our share
of revenue from coal imports handled
our private partner.”

The agreement would help the port
facilitate ready coal supply to mega
thermal plants coming up along the
western coast, especially the one in Kudagi,
near Bijapur in Karnataka and another
plant in the Sindhudurg region of Maharashtra.

ECB lenders seek assets as mortgage

Auto parts, pharma & mining firms targeted

Indian companies seeking external commercial borrowings (ECBs)

are now required by overseas lenders to mortgage their assets.

Even those that contracted ECBs in 2006-07 and 2007-08 have

been told to restructure the debt.

Overseas lenders have taken this step in view of faltering

profits and drops in share prices of Indian companies.

Lenders have specially targeted companies in auto ancillary,

pharmaceutical and mining sectors, according to bankers.

They have also demanded a quick restructuring of ECBs

if the borrowing firm has gone in for business restructuring or merger.

In one case, a petrochemical company merged with another.

A project for which $1 billion in ECBs was raised became an

sset of the merged company. Because of the merger the secured

loan, raised in 2006, had to be first converted into an unsecured loan

and then to a corporate loan. Some lenders also pulled out of the loan following this.

“Banks were not comfortable as the loan turned unsecured,” explained

a Mumbai-based investment banker, requesting anonymity

as he represented a foreign lender.

According to another official in the corporate banking division

of a big foreign bank, quite a few companies have not been able

to meet their covenants (the agreement to maintain ratios like debt

to equity, debt to operating profit and net worth).

“Their lenders have asked them to attach immovable assets to

the unsecured loans.”

According to him, the potential of a default is higher where the

share price is dropping or profitability is under pressure.

To reduce the risk on their books, the lenders have forced

a loan restructure.

Since banks cannot accept shares of a company as a mortgage

due to regulatory issues, they have to go in for immovable assets

like machinery, land and property.

For Indian companies 2006-07 and 2007-08 were bountiful ECB years,

which saw foreign lenders eager to lend. In 2006-07, Indian firms raised $25 billion

in ECBs; in 2007-08 the tally was $31 billion. About 90 per cent of the ECBs

were unsecured loan, say bankers.

“If a loan is given for project finance and acquisitions, the project

or the acquired company is mortgaged as an asset; the balance

amount of the loan is unsecured,” says Joiel Akilan, chief representative

of Banco Bibao Vizcaya Argentaria, a foreign bank in India.

The ECB market has turned tough not only for existing

customers but also companies that now plan to raise debt overseas.

“Small and medium sized companies hitting the ECB market

for the first time or those that don’t have a credit history find

it difficult to raise money abroad,” says an investment banker at ICICI Securities.

Akilan says, “Short-term liquidity is not a problem, but when it comes to long- term loans,

bankers are wary and uncertain.” According to him, many foreign banks

are also re-strategising their lending to markets.

Brigade To Raise Rs 900 Cr

The real estate developer has mandated

JP Morgan to raise the funds,

which will be infused at the SPV level.

Brigade To Raise Rs 900 Cr From PE -

Brigade Enterprises is looking to raise close

to Rs 900 crore through the private equity

route to expand its hospitality vertical as well

as to develop a 120 acre township in Bangalore.

The Bangalore-based real estate developer has

J P Morgan to raise the funds, which will be infused at the SPV level.

Mauritius Fund invests in Ashirvad micro Finance, Chennai

A Mauritius-based venture fund has picked up

24 per cent stake in the Chennai-based Asirvad

Micro-finance Private Ltd., a company founded by

a group of promoters led by S.V. Raja Vaidyanathan,

an IIT and IIM alumni with close to three decades

of business and managerial experience.


Lok Capital LLC of Mauritius has invested close

to $1.75 million in the company for a 24 per cent

stake at an undisclosed premium. Asirvad, according

to Mr. Vaidyanathan, is focussed on lending to poor

women, who are engaged in regular income-generating

economic activities.

Since its inception in 2007, Asirvad has an outstanding

portfolio of around Rs. 35 crore. It has now a client base

of 75,000 women borrowers. Mr. Vaidyanathan said

Asirvad was hoping to drive the loan portfolio

up to Rs. 75 crore by 2010.


The company is now focussed on seven districts

in Tamil Nadu. Soon, it would spread its wings to

other parts of the State, he added. Asirvad has around

21 branches in the State with a staff strength of around

150 people. Following its investment into the company,

a nominee of Lok Capital has been inducted into the board

of Asirvad, which also has three nominees from the

promoter-family and two independent directors.


At the current equity base of around Rs. 7.40 crore, Asirvad

, Mr. Vaidyanathan said, had enough leeway to drive up

the business through borrowings.


Lok Capital is primarily focussed on investing

in commercially-oriented micro-finance outfits

in India. It has already invested in national micro-finance

institutions such as Spandana, Basix and Ujjivan.


“Lok Capital’s experience will go a long way in guiding

Asirvad to adopt best in class practices in all

areas of management,” Mr. Vaidyanathan said.

Tridem to start integrated port and power project

Tridem Port & Power Company Pvt Ltd will soon commence its
integrated port and power project in Nagapattinam, near Chennai.
Tridem was incorporated as an SPV in 2007 with the main objective
of developing the project. ISMT Ltd, Pune, a listed Company,
(integrated specialized seamless steel tube manufacturer ),
has joined hands with the Tridem Group to undertake this giant integrated Project.
The total investment of the project will be Rs10,000 crore.
The initial phase will have an integrated investment
of Rs4,000 crore – Rs2,500 crore for power plant and
Rs1,500 Crore for the port. The investment will be
funded through 30% equity and 70% debt.
The Government of Tamil Nadu gave a letter of facilitation
to the Company in September, 2007 for setting up a Merchant Power
Plant of 2000 MW capacity in Kilapidagai and Karapidagai
North and South Village areas of Nagapattinam District.

The Government also accorded approval for establishing a
captive port at Vettaikaran Iruppu Village in Nagapattinam
District, 3 km east of the above Thermal Power Plant site.
The Government further sanctioned the port limits with a
seafront of 3.2 km for establishing a deep water Port.
This integrated project will occupy a sprawling 3000 acres
wasteland and convert it into economically
vibrant infrastructural industrial base.
According to Company sources, this Coastal Power Plant
will largely depend on imported coal for its fuel.
In order to ensure fuel security for the coal fed
Thermal Power Station, the Company has taken
steps to invest in coal mines in South and Central
Kalimantan provinces in Indonesia, with adequate reserves.
The Power component: The Detailed Project Report
for the Power Project was prepared by the globally
reputed firm Fichtner Consulting Engineers (India) Pvt. Ltd.
relevant studies have been completed. Notice Inviting Tender
(NIT) for Boiler-Turbine-Generator package including it’s
auxiliaries through International Competitive Bid (ICB)
was issued on 4th June 2009. The bids for BTG package
have been received and are being evaluated.
The total Power Plant capacity will have to be
necessarily reached in stages due to the constraints
on equipment delivery by Manufacturers and is
planned to be executed in phases. The first 2
phases will be sub-critical followed by super-
critical technology based units. The Port and the
First unit of the Power Plant will be commissioned
in the last quarter of 2011 and the subsequent
phases will start functioning every six months thereafter.
Power will be sold to discoms and HT users.
The Company has already signed relevant MOUs for
execution of PPAs with Organizations like Power
Trading Corporation Ltd.,and other users.

The port componet: Tridem, engaged the reputed
Oceanography Department of IIT, Madras,
for preparing the Detailed Project Report for the
Port, with optimal designs, which was completed in February, 2009.

The final design was also vetted by the
Internationally Acclaimed Australian Port Consultancy
Firm, SOROS. Under the guidance and supervision of
IIT Madras, all the necessary Seabed Investigations,
Shallow Seismic Surveys, Delineation of HTL, LTL and
CRZ boundaries (by the National Institute of
Oceanography in October, 2008), Mathematical
Model Study for all weather Port, Geotechnical
investigations, Rapid Marine Environmental
Impact Assessment and Environmental
Managerial Plan were completed in 2008.
The all weather deep water Port will initially
have a capacity of 20 million tonnes per annum.
To start with 40,000 DWT Coal vessels will call at
the Port, fully equipped with mechanized coal
systems with coal unloaders and conveyors in the
Port area. The coal handling capacity will be 40,000
tonnes per day. On completion of the second phase,
1,00,000 DWT vessels will call at the Port.
Vendor discussions and contracts are at advanced
levels after negotiations with Dredging and
Breakwater Contractors, Berth Construction Agencies,
Equipment Suppliers and Civil Contractors.
The construction works are scheduled to begin
in September, 2009.
The Company has achieved in-principle financial
closure for Phase I of the project. The Port and
Project sites enjoy excellent road and broad-gauge
railway connectivity. The Company spokesman
further said that “Tridem Port and Power
Company on commissioning will offer
unlimited employment potential to the
locals and is bound to kickstart unparalleled
infrastructural growth activities and will help
unleash the immense potential for small
and big industries in the vicinity”.