Reliance group company BSES has raised $100 million in dollar and yen external commercial borrowings at an average all-in cost of 110 basis points over the London inter-bank offer rate.
ABN Amro, Rabo Bank, Citibank and Standard Chartered Bank have underwritten the ECB. These banks, in turn, are likely to retain a part of the loan on their books while parcelling out the rest. The 5-year ECB has a bullet repayment facility.
"This loan has been raised at one of the finest rates by corporate India and certainly the finest by a power company. The proceeds will be utilised to improve the distribution infrastructure in Mumbai," banking industry sources said.
BSES holds the exclusive distribution licence to supply power to the northern suburbs of Mumbai.
This is BSES' second external fund raising exercise in the last seven months. In October 2002, it had raised $120 million through foreign currency convertible bonds supported by a standby letter for credit enhancement.
The bonds carry a coupon rate 0.5 per cent and have the option of being converted into global depository receipts, which will be listed on the London Stock Exchange.
This issue was oversubscribed by a clutch of investors and banks spread over Asia and Europe and arranged by Standard Chartered Bank.
BSES, after Reliance took management control, has undertaken a exercise to clean its balance sheet.
The company has de-subsidiarised a number of its arms by transferring the stake to other BSES group companies.
These include the three power distribution companies in Orissa in which it has a 51 per cent stake, as well as the distribution companies it bagged in Delhi last year.
This move ensures that the BSES balance sheet remains insulated from the performance of any of de-subsidiarised firms.
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