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KIAL Inks MoU to Raise Rs 892cr Loan

Kannur airport is also poised to get an investment of Rs 100 crore from the Airports Authority of India

Published: 21st May 2015 06:03 AM  |   Last Updated: 21st May 2015 06:03 AM   |  A+A-

KIAL

THIRUVANANTHAPURAM: The Kannur International Airport Ltd (KIAL) on Wednesday inked an MoU with a consortium of three banks for securing a loan of Rs 892 crore for financing the airport project. KIAL is also poised to get an investment of Rs 100 crore from the Airports Authority of India (AAI) ‘immediately,’ Ports Minister K Babu, who handles the aviation portfolio, said.

Of the total project cost of Rs 1,892 crore, Rs 1,000 crore is to be raised through equity and Rs 892 crore as loans from banks. The agreement on the latter was signed on Wednesday.

Canara Bank, which is the lead bank, will provide Rs 692 crore, South Indian Bank Rs 110 crore and Federal Bank Rs 90 crore at an interest rate of 10.40 per cent. The repayment period is 11 years plus a moratorium of two years.

Even though the AAI had initially agreed to invest Rs 260 crore, they had not done so yet citing financial constraints. Following talks held between Chief Secretary Jiji Thomson, KIAL director G Chandramouli and AAI officials in New Delhi, AAI officials had agreed to plough in Rs 100 crore immediately. “If it works out we hope to sign the MoU on June 5,” Babu said, adding that discussions are on concerning the remaining Rs 160 crore.

The State Government holds 35 per cent share in KIAL and PSUs 23 per cent while AAI and the private sector holds 26 per cent and 16 per cent respectively. Fifty-five per cent of work on the runway has been completed and 35 per cent on the terminal, Babu said.

Although rain and disputes over blasting at the project site had delayed the work, KIAL hopes to conduct the first test flight by December 31 this year and launch commercial operations in May 2016.Canara Bank general managers B K Bajaj and U Ramesh Kumar, Federal Bank general manager Varghese K I and South Indian Bank deputy general manager K S Satheesh Kumar were present.

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