Vicat Sagar Cement Limited (VSCL), a 51: 49 per cent joint venture between France-based Vicat and Hyderabad-based Sagar Cements, is all set to achieve financial closure for Phase I of the Rs 2,500-crore project by January 2010.
“Due diligence of the project has been completed and we expect to achieve financial closure by the first week of January. We will also start construction of the plant in the same month,” Sagar Cements executive director, S Sreekanth Reddy, told Business Standard, adding that Phase I was expected to be commissioned by 2012.
VSCL is developing a 5.5Mta integrated greenfield cement plant near Chatrasala village in Gulbarga district of Karnataka in two phases. The first phase, with an installed capacity of 2.7Mta, is estimated to cost Rs 1,750 crore.
The International Finance Corporation (IFC), a member of the World Bank Group, is expected to invest Rs 450 crore in the project. “IFC is expected to take a final decision in this regard at its board meeting to be held next month,” Reddy said.
On the other hand, IFC stated that it was considering an investment, in the form of a combination of debt and equity or quasi-equity, in the range of US$75-90m (INR375-450 crore).
According to Reddy, the first phase, which also involves the construction of a 40MW power plant and a waste recovery plant, is being funded through an equity of INR400 crore and a debt of INR1350 crore. An additional INR250 crore will also be borrowed towards working capital.