A consortium of local and regional banks and institutions has participated in a syndicated term-loan facility for the amount of $42 million to Indo-Jordan Chemicals Company. The Export and Finance Bank acted as the arranger and facility agent to the syndication.
The issue was oversubscribed with coverage ratio of 1.23 times the amount of the loan, whereby the total commitments from participants in the syndicate totaled $51.75 million, stated a press release.
The aim of the facility is to re-finance Indo-Jordan's debts via prepayment of outstanding loans bearing high interest rates. International financial institutions such as the International Finance Corporation (IFC), Credit Commercial De France (CCF), Netherlands Development Finance Company (FMO) and Standard Chartered (SC) provided such loans during the project's start-up stage. These loans will effectively be replaced by this syndication, which was priced in a way to reflect the lowered risk profile of the company and to benefit from the prevailing low interest rate environment.
The re-financing terms of this facility reduce the interest rate to three-month LIBOR plus a margin of 2.25 percent, whereby Indo-Jordan will significantly reduce their interest cost, thus maximizing their returns. The facility is structured in a way to allow the original lenders to sell part or all of their participation in the loan to other parties in the future.
Among those banks that have expressed their commitment to act as lenders in the syndication are Export & Finance Bank, Housing Bank for Trade & Finance and the Arab Investment Company.
Indo-Jordan Chemicals Company was incorporated in 1992 for the purpose of setting up and operating a Phosphoric Acid and Sulphuric Acid Complex in Jordan by availing the Rock Phosphate from Jordan Phosphate Mines Company (JPMC) and exporting the production of Phosphoric Acid to Southern Petro Chemicals Industries Corporation (SPIC).
The project is the only Joint Venture in Jordan of its size by an Indian Company. The three shareholders in Indo-Jordan are SPIC, JPMC and the Arab Investment Company. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
