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Portfolio/Calcom Cement

INR 1,120 million partial credit guarantee of two Indian banks’ lending to a new cement plant in Assam, India

Calcom Cement
Tools
India

Overview

DATE OF TRANSACTION

SEPTEMBER 2009

COUNTRY

INDIA

FINANCING PARTNERS

HDFC BANK, AXIS BANK, CORDIANT CAPITAL

GUARANTCO GUARANTEE

INR 1.12 BILLION (USD 25 MILLION)

SECTOR

INPUTS TO INFRA

TOTAL TRANSACTION AMOUNT

-

GuarantCo Benefits

Although the economic and security situation in the north-east region of India has vastly improved in the recent past, Indian banks are still cautious lending to projects in the region. HDFC Bank, the lead arranger, was struggling with syndication of the project debt. GuarantCo’s guarantee enabled the additional financing required for the project to achieve financial close.

The amount required was above GuarantCo’s normal maximum exposure so INR 480m of the total INR 1,120m was syndicated by GuarantCo to Cordiant Capital, a Montreal based Emerging Market fund manager, thus leveraging in further private sector support.

Development Benefits

The project will create the largest cement production facility in the North-East region of India which suffers from a chronic cement production deficit. It will help bring down the abnormally high cement prices in the region by reducing the substantial cost of freight that suppliers currently bear for cement brought in from mainland India.

It is also the largest single private sector infrastructure investment in the North East. Besides providing employment and increasing economic activity in the troubled region, the project will support other infrastructure projects such as housing, roads and hydropower thereby multiplying the developmental benefit.

ALL PROJECTS

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