Grup Maritim refused loan offer for Ennore port terminal
A group led by Spanish port operator Grup Maritim TCB SL refused a loan offer of Rs.1,386 crore to build a container terminal at Ennore port in Tamil Nadu and instead exited from the project, two bankers briefed on the matter said, Live Mint reports.
“It was not due to lack of bank funding that the Grup Maritim team pulled out of the project,” said an executive at State Bank of Mysore, one of the two people. “It was due to some other factors which only the Spanish firm can explain.” A spokesman for the Grup Maritim consortium declined to comment.
The group had won a contract through a public auction to build a Rs.1,407 crore terminal capable of handling 1.5 million containers a year at the Union government-owned port on the east coast.
The Bay of Bengal Gateway Terminal Pvt. Ltd, a company set up by the consortium to implement the project, signed a concession agreement with Ennore Port Ltd on 13 August 2010. The group also included Eredene Capital Plc, Obrascon Huarte Lain SA and Lanco Infratech Ltd.
On 27 September, the consortium said it was withdrawing from the project. Ennore port has since terminated the contract.
“The decision to withdraw from the project was taken in light of the changed economic outlook in India since the concession was granted—the increased cost of local financing, depreciation of the Indian rupee and lower projected growth in container traffic,” Eredene, a 22% shareholder, said in a statement in London on 27 September. Eredene, an India-focused infrastructure investor, is traded on the Alternative Investment Market of the London Stock Exchange.
“The Grup Maritim TCB team were agreeable to all the terms set by the lending consortium led by State Bank of India (SBI). But instead of taking the loan they decided to withdraw from the project,” said the official quoted earlier.
The lending consortium discussing the loan included SBI, State Bank of Travancore (SBT), State Bank of Mysore, Indian Overseas Bank, Bank of Baroda and Exim Bank. SBI could not be reached immediately for comment. The loan worth Rs.1,386 crore was for a tenure of 15 years and carried an interest rate of 2.9 percentage points above SBI’s prime-lending rate, the executive said.
“In fact, the lending consortium had issued a sanction letter for the loan to the Grup Maritim consortium in December 2011 based on terms agreed upon earlier, but the consortium back-tracked from the terms and the loan had to be re-negotiated,” said an executive at SBT. Both officials declined to be named.
After renegotiations, the two sides agreed afresh on the loan terms, but the Grup Maritim team decided not to take up the loan to build the terminal, the second executive said.
