Kesoram plans to raise funds from Tata Cap to refinance its Rs 1,500-crore debt

Mumbai: Kesoram Industries, which is merging its cement business with UltraTech Cement, is looking to refinance the ₹1,500-crore debt borrowed at 20% from Goldman Sachs, Cerberus and Edelweiss, and is in talks with Tata Capital for it, two people aware of the development said.

The company is looking for a one-year finance before the asset moves to UltraTech following regulatory clearances, they said, adding that Kesoram is looking to refinance the debt at 12-13%. Talks for the new loan could close by the end of this month, they added.

"Kesoram is in talks with Tata Capital to raise debt as the 'make whole' for the existing debt will get over in March this year," said one of the sources. "The loan will be used to refinance existing lenders and will help Kesoram reduce interest cost by as much as 7-8%." "Make whole" is the call option on a bond given to an issuer to pay off the remaining debt.


Another source said the debt is getting refinanced for a shorter tenor until the requisite clearances for the transfer of asset to UltraTech is in place. Spokespersons of Kesoram and Tata Capital did not respond to requests for comment. In November 2023, Kesoram had announced the merger of its cement business with UltraTech.