Sical Logistics achieves financial closure for greenfield project

Sical Logistics Ltd on March 19, 2008 announced that it has achieved financial closure for its greenfield iron ore terminal project at Ennore Port.

YES BANK, India's new age private bank, is the lead arranger and sole underwriter for the INR 3.4 billion loan, the other members of the loan syndicate being United Bank of India, UCO Bank and India Infrastructure Finance Company Ltd.

The project is being undertaken by a special purpose vehicle (SPV), Sical Iron Ore Terminals Ltd, promoted by Sical Logistics, with 89% equity stake, and L&T Infrastructure Development Projects Ltd.

The iron ore terminal is being developed on a build-operate-transfer (BOT), revenue-sharing contract with Ennore Port for 30 years including the construction period. The terminal will have a capacity for 12 million tonnes of cargo per year. Facilities include a jetty, ship loader, mechanized handling system with conveyor, storage, and wagon unloading system.

Initially, the terminal will handle Panamax and Cape sue vessels up to 150,000 MT DWT; after dredging, the terminal would be able to handle vessels of 250,000 MT DWT. Other features include the capability of an average 75,000-tonnes-per day ship loading rate; a stockpile area that can store 2.4 million MT of Iron ore; and a railway wagon unloading system that can handle up to twelve 3500-tonne rakes per day.

Construction work at the terminal began recently. In-principle approval has also been obtained from the Indian Railways for dedicated rail siding.

COMMENT FROM ASHWIN MUTHIAH, CHAIRMAN, SICAL LOGISTICS

The financial closure of the entire debt component for Sical Iron Ore Terminals was a significant achievement considering the market conditions, said Sical Logistics Chairman Ashwin Muthiah.

"We are impressed with the dedication and professionalism of the team at YES BANK; taking up and delivering on the responsibility of underwriting and arranging an INR 3.4 billion loan in a single shot is no doubt a proud achievement for YES BANK," Ashwin Muthiah said.

The Ennore terminal will open up major possibilities, both in terms of direction and volume of movement, given its location on India's eastern coastline, close to the strong demand centers in the Asia-Pacific, Ashwin Muthiah said.

The terminal further strengthens Sical's strategic framework of multi-modal integrated logistics, Ashwin Muthiah said, "Taken together with Sical's trucking and container train operations, the value proposition to the customer is clear--a significant debottlenecking of the supply chain, resulting in a seamless flow from the mines to the terminal and to the ultimate destination ports," he said.