For the Hyderabad metro rail project, L&T is close to striking a Rs 1,000-crore external commercial borrowing (ECB) deal with India Infrastructure Finance Co (IIFCL). Chief Executive and Managing Director of L&T Hyderabad Metro Rail, VB Gadgil said that the deal is at an advanced stage and expect to conclude it by September. L&T may even consider additional ECB loans.
These ECBs help bring down the interest burden by about four per cent even after including Libor and hedge costs, Gadgil said. L&T Hyderabad Metro Rail is a special purpose vehicle (SPV) to execute the metro project. By accessing these funds, the company will be able to bring down the overall costs. These loans also come with a tenure from 20 to 25 years, bringing flexibility, he added. While the SPV has achieved financial closure, it has several options to augment additional funds to reduce the impact of high interest rates.