Posted on September 26, 2017
By Ateeq Shaikh, DNA
Essar Ports is contemplating refinancing its debt of around Rs 3,000 crore to bring down the interest cost.
“Essar Ports’s debt is around Rs 3,000 crore with present interest rate of 11%. Ideally, we would like it to be somewhere at 9% and are looking at ways to refinance our debt,” said Rajiv Agarwal, managing director, Essar Ports.
Out of the total debt, Rs 560 crore is only for the Vizag terminal that is undergoing upgradation and modernisation. The estimated cost to double the terminal’s iron ore-handling capacity is Rs 830 crore.
On the expansion plans, Essar Vizag Terminal’s chief executive officer Ch Satyanand said, “With this upgradation plan, the terminal’s capacity will increase from the present 12.5 million tonne per annum (mtpa) to 23 mtpa. Almost 90% of the work has been completed.” The terminal’s current capacity utilisation is 60%, which is close to 10 mtpa.
The modernisation includes dredging for an all-weather deep draft facility, high-capacity tipplers, high-capacity reclaimers, conveyor systems (9.3 kilometre), among other things.
Essar Ports had bagged the terminal in May 2015 on design-build-finance-operate-transfer (DBFOT) basis for a period of 30 years on 31% revenue-sharing to Visakhapatnam Port Trust. The company had set June this year as the initial deadline for the project, which was rescheduled to September, and later on to November.
In the last two years, Essar Ports has paid around Rs 244 crore to Visakhapatnam Port Trust, including Rs 200 crore fee, annual licence fee of Rs 20 crore and Rs 22 crore as revenue share.
The company claims after the completion of the upgradation-cum-modernisation project, the loading capacity will increase to 120,000 tonnes per day and the facility will be able to berth vessels up to 200,000 deadweight tonnage, with a draft of 18 metre on the outer harbour.
Agarwal also said, “The facility has significant potential to increase Essar Vizag Terminal’s share of third-party cargo business to more than 40%. As a result of the enhanced performance parameters, exporters on the east coast will benefit immensely from shorter turnaround times, which will translate into competitive freight costs.”
Source: DNA
