Kesoram Industries, in the process of merging its cement business with UltraTech Cement, is seeking to refinance its existing Rs1,500-crore debt borrowed at a steep 20% interest rate from financial entities including Goldman Sachs, Cerberus, and Edelweiss. The company is currently in discussions with Tata Capital to secure a one-year finance arrangement at a more favorable interest rate of 12-13%.
Sources familiar with the matter revealed that Kesoram aims to finalize the talks and secure the new loan by the end of this month. The intended purpose of this refinancing is to address the debt incurred from the existing lenders and ultimately reduce Kesoram's interest costs by a substantial margin of 7-8%. The "make whole" provision on the existing debt is set to expire in March this year, prompting the urgency for the refinancing.
The funds raised through the new loan will be utilized as a temporary financial solution until the regulatory approvals for the transfer of assets to UltraTech Cement are obtained. Kesoram had previously announced the merger of its cement business with UltraTech in November 2023. As of now, spokespersons for Kesoram and Tata Capital have not provided any official comments on the ongoing developments.