The Hindu : Business : Gangotri Textiles' expansion plan

Online edition of India's National Newspaper
Saturday, Mar 11, 2006

Business

Business

Gangotri Textiles' expansion plan

Staff Reporter

To get Rs. 257 cr. consortium loan

COIMBATORE: The Coimbatore-based Gangotri Textiles has embarked on a Rs. 351-crore expansion project. And, of this Rs. 257 crores will be extended as loan by a consortium of banks.

This is the first time in Coimbatore that eight banks join hands to extend loan of such a size to a single textile company under one documentation, says R. Nadanasabapathy, Head of the Regional Office, SBI Capital Markets Limited, Chennai.

The Managing Director of the company, Manoj Kumar Tibrewal, explains that for a bank, the risk factor is more while extending assistance to a project of such a size. Hence, the interest rate on stand-alone lending would be higher. With a number of banks joining together, the borrower company is able to get a competitive interest rate.

SBI Capital Markets has syndicated this 11-year term loan to the company.

The banks (Canara Bank, Corporation Bank, United Bank of India, State Bank of Mysore, Syndicate Bank, State Bank of Indore, State Bank of Travancore and State Bank of Hyderabad) will jointly extend the loan at eight per cent.

The company has also filed a Draft Prospectus with the Securities and Exchange Board of India (SEBI) for its proposed follow-on public issue of Rs. 55 crore.

Gangotri Textiles plans to add about 50,000 spindles to its existing capacity of about 17,000. It will set up weaving and processing facilities too (in Perundurai) and increase its garment capacity to 4,000 pieces a day from the current 1,000. It will also instal windmills with a total capacity of 9.90 MW. The entire expansion project will be completed by October 2007.

Printer friendly page
Send this article to Friends by E-Mail