L&T raises Rs 500 crore from Yes Bank for Metro Rail project

09 Jan 2013

L&T Metro Rail, the concessionaire for Hyderabad Metro Rail, has raised Rs 500 crore short-term loan from YES Bank, outside the consortium of lenders which have pledged close to Rs 12,000 crore loan to the ongoing project. This development has eased pressure of bringing equity money in large amounts early on into the project by the parent company.

The project concessionaire, which has so far spent Rs 600 crore on the works in addition to Rs 100-200 crore advances towards contracts, most of which has been funded by the short-term loan, is not even ruling out the possibility of inducting a strategic partner after the rail gets operational. Further, the company is planning to draw down a large amount in the range of Rs 300 crore to Rs 500 crore from the regular loan next month.

Larsen and Toubro (L&T) was awarded the Hyderabad Metro Rail Project by Government of Andhra Pradesh. L&T incorporated a Special Purpose Vehicle - L&T Metro Rail (Hyderabad) to implement the Project on Design, Built, Finance Operate and Transfer (DBFOT) basis.

The Company, back in September 2010, signed the Concession Agreement with Government of Andhra Pradesh and completed the financial closure for the Project on March 1, 2011 in record six months. A consortium of 10 banks led by the State Bank of India sanctioned the entire debt requirement of the project. This is the largest fund tie-up in India for a non-power infrastructure Public Private Partnership (PPP) project.

Further, L&T Metro Rail is also hoping to seal deals on automatic fare collection system and elevators within a month. Meanwhile, the rest of the procurement orders, like depot equipment, will be done by mid February.

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