Saddled with a debt of R26,000 crore, IL&FS Transportation Networks India (ITNL), the road development arm of Infrastructure Leasing and Financial Services (IL&FS), is looking to refinance about R9,000 crore. “We are expecting to refinance loans amounting to R6,000 crore on a project level and about R3,000 crore on a corporate level by issuing non-convertible debentures (NCD),” Mukund Sapre, ED, ITNL, told FE, declining to give details of specific lenders. However, FE understands the company has taken loans from a clutch of both public and private sector banks. “The timing of the NCD issue is not confirmed,” Sapre added.
ITNL’s consolidated interest outgo according to last reported figures (FY16) was R2,531 crore, of which R1,102 crore was standalone interest. “Currently, the average interest rate is 11.5-12.75% and we expect post all our initiatives (NCD & refinancing), the rate will drop by 200 basis points to 8.5-10%. The interest saved should be between R300-400 crore on account of both project level refinancing (SPV refinancing) and corporate level (NCD issuance),” Sapre further said.
Till date, ITNL has refinanced R838 crore at the project level. It is currently looking to refinance two more projects, namely, Moradabad-Bareilly Expressway (MBEL) on which it has a debt of R1,713 crore. The second project is Jorabat Shillong Expressway (JSEL) on which it has a debt of R830 crore. Both the projects were developed on a design, build, finance, operate, transfer (DBFOT) basis. The project cost of MBEL was R3,061 crore and it became operational on January 6, 2015.
The project cost for JSEL was R1,351 crore and it became operational on January 28, 2016. “The declining interest rates are expected to provide much needed support, especially to some of the highly leveraged infrastructure companies. With lower interest rates, many companies have been looking to refinance some of their high-cost debt and thereby lower their overall interest costs. In the near term, more such refinancing is expected to take place in the infrastructure sector,” Alok Deora, an analyst at IIFL Wealth, said.
ITNL’s consolidated debt at the end of FY 16 stood at about R27,000 crore while standalone debt was R9,000 crore. With a total of 23 operational projects across the country, ITNL has the most number of projects, more than any other company. Of this, 16 are toll projects while seven are annuity projects.