ICICI Bank has bagged the Rs 2,000 crore deal to provide debt funds for cooperative major Iffco that acquired Oswals-owned Di Ammonium Phosphate (DAP) facility at Paradip in Orissa.

The ICICI Bank's offer of an aggressive 7.15 per cent coupon rate to Iffco was irresistible for the latter on the 5-year loan.

ICICI Bank managing director and CEO K.V. Kamath clinched the deal for his bank after having a talk with Iffco managing director Uday Shankar Awasthi.

In order to make available the Rs 2,000 crore loan to Iffco, the ICICI would raise funds from international debt market at competitive rates. ICICI, according to sources, has also undertaken to take on the foreign exchange and hedging risk.

Banking sources said, "This is the best offer Iffco could have got as no other corporate in recent times got rupee funds at this rate." From ICICI's side, Iffco would have been the best bet, as the cooperative has no long-term debt on its balance sheet.

The Finance Ministry's decision on January 3, 2006 to allow multi-state cooperatives to access the external commercial borrowings (ECBs) would enable the ICICI to raise the debt funds abroad against which rupee loan would be provided to Iffco.

While ICICI would raise funds abroad on its own strength, the bank has been allowed to use the name of Iffco as the end-user of these funds. Iffco has bought up the Oswals Chemicals & Fertilisers plant at Paradip port for Rs 2180 crore in an all-cash deal.

( Hindustan Times)