MIAL achieves financial closure

MUMBAI: Mumbai International Airport (MIAL), the GVK-led consortium that operates the Chhatrapati Shivaji International Airport (CSIA) at Mumbai, on Tuesday achieved financial closure for its project. MIAL has tied up its required long-term debt of about Rs 4,200 crore with a consortium of 14 banks and financial institutions led by Industrial Development Bank of India (IDBI).

The debt, in conjunction with an equity infusion of about Rs 1,600 crore, will be used to redesign the airport over the next seven years. CSIA will have an entirely new integrated passenger terminal, new runways that will take its passenger handling capacity up to 40 million a year.

The loan, with a 7-year moratorium, is at an interest rate of 215 basis points over the three-year government bond yield. This works out to about 10.2% currently. The repayment of the loan will commence from the end of the seventh year and will be repaid in 120 monthly payments thereafter.

The consortium also has the right to use about 10% of the total land area, about 200 acres, for commercial development. This will be done in parcels over the next few years, sources said. The loan is flexible and GVK could look at replacing it with foreign currency borrowings in the future, he said. MIAL is a JV between the GVK-SA consortium, South African airports and Airports Authority of India. The project will be ready by 2010.