Sept. 20 (Bloomberg) -- Reliance Infrastructure Ltd., controlled by billionaire Anil Ambani, approached banks for a 70 billion-rupee ($1.5 billion) loan to fund a new rail project in Mumbai, according to a person familiar with the matter.
The borrower is seeking a loan with a maturity of about 12 years, the person said, asking not to be identified because the discussions are private. Details will be decided following talks with lenders, he said.
A Reliance Infrastructure-led group in January won the contract to build the second stage of a 110 billion-rupee rail project in the nation’s biggest commercial centre, according to an earlier company statement.
While India’s economy has expanded at an 8.5 percent pace in the last five years, poor transport and other facilities could cost 1.1 percentage points of growth, or $200 billion in fiscal 2017, McKinsey & Co. said in a report last year. The nation’s Planning Commission said India will need to spend $1 trillion on highways, ports, airports and utilities between April 2012 and March 2017.
“If they are able to organize this loan it represents a milestone achievement for the project and for the company,” Harshvardhan Dole, a Mumbai-based analyst at India Infoline Ltd., said today by phone. “It’s a very good indication that financial institutions are comfortable with the project,” he said.
Reliance Infrastructure has the equivalent of about $1.6 billion in loans that mature by end-2026, according to data compiled by Bloomberg. The company expects to work on 11 infrastructure projects in the financial year that began April 1, Chief Executive Officer Lalit Jalan said in July.
Reliance Infrastructure spokesman Ravi Sodhi directed a request for comment to Mumbai Metro spokesman Ravi Muthreja, who did not reply to an email asking for further details.
To contact the reporter on this story: Suprotip Ghosh in Mumbai at Sghosh47@bloomberg.net.
To contact the editor responsible for this story: Will McSheehy at email@example.com.