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BIAL aims to raise Rs 10,200 crore via syndicated loans

The airport operator, with more than 50% Fairfax ownership, has availed the loans from State Bank of India and Axis Bank, two people with direct knowledge of the matter told ET.

, ET Bureau|
Apr 12, 2019, 07.33 AM IST
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BIAL’s new terminal should be ready in 2021 and its second runway is expected to be operational by October this year.
Fairfax-owned Bengaluru International Airport Ltd (BIAL) is raising Rs 10,200 crore of expansion funds through a syndicated loan facility, pointing to increasing corporate demand for resources and the willingness of banks to open credit lines for companies.

The airport operator, with more than 50% Fairfax ownership, has availed the loans from State Bank of India and Axis Bank, two people with direct knowledge of the matter told ET.

BIAL is now developing new infrastructure that would include a new terminal, a second runway, a new multi-modal transport hub and more roads and ancillary utilities. It runs India’s third-busiest a i r por t after New Delhi and Mumbai.

“The finalised project cost for this expansion is Rs 13,300 crore, which has been financed by a term loan of Rs 10,200 crore from State Bank of India and Axis Bank,” a BIAL spokesperson told ET.

SBI and Axis Bank did not reply to emailed queries. Overall bank credit expanded 14.5% to Rs 95.5 lakh crore as on March 15, show latest data from the RBI.

The loans would mature in 15 years and interest rates are linked to the respective MCLR of the lenders, BIAL said. These two banks are likely to have charged interest in the range of 8.75-9%, said one of the persons cited above. “The company is said to have approached other large banks too, but it has finally availed the loan facility from two banks,” said the person. Both SBI and Axis Bank may partially downsell the loans later.

BIAL’s new terminal should be ready in 2021 and its second runway is expected to be operational by October this year. “Over the past 10 years, Bengaluru airport has evolved as the gateway to south India and with this next phase of expansion, the aim is to position our airport as the gateway to a new India,” Hari Marar, MD, BIAL had said earlier. Kempegowda International Airport, as it is known, is the first green-field airport in India to be built as a private-public partnership.

Fairfax (54%) and Siemens Projects Ventures (20%) own nearly three-fourths of the company. The government owns the rest.

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