Exim Bank plans to raise $2-2.5 b in Fx debt next fiscal

The Exim Bank is looking to raise USD 2-2.5 billion from overseas in the next financial year, a top official said Wednesday. The overseas borrowing will include private placements, bond issues and foreign loans.

"We will be tapping the market to raise around USD 2- 2.5 billion for FY20. The first tranche should be done by June or July," managing director David Rasquinha told reporters. In the outgoing financial year, the bank had raised USD 1.5 billion through foreign currency bonds.

Wednesday the bank listed a USD 500-million notes under its USD 10-billion medium term note programme, on the India International Exchange (India INX). Rasquinha said the bank is eyeing a 10 percent loan growth in the current financial year.

"We'd be looking at a growth of 10-15 percent over the previous year in terms of total loan portfolio in FY20. Net loan portfolio was around Rs 90,000 crore in FY18 and we should be closing FY19 at around Rs 1.07 lakh crore," he said. Rasquinha said the bank has received Rs 5,000 crore from government, including Rs 4,500 crore in the form of bonds, this financial year.

Deputy managing director Debasish RPT Debasish Mallick said the bank has a total exposure of Rs 453 crore, which includes fund and non-fund-based loans, to the cash-strapped IL&FS group. Of this, Rs 263 crore are non-fund exposure in the form of bank guarantees given to the group's various road projects group in Spain, Botswana and Ethiopia. Mallick said there are no issues pertaining to the bank guarantees given to the road projects in Spain and Botswana. But there are issues related to completion of projects by the group in Ethiopia.

"The trouble is in Ethiopia. It's a guaranteed amount and is still pending. We, IL&FS group and the Ethiopian project authority are all trying get IL&FS replaced by some other contractor to ensure project completion. But there is a problem there," Mallick said. The bank's has a Rs 22.5-crore exposure to the IL&FS group's road projects in Ethiopia, he added.

It can be noted that ITNL, through its wholly-owned Spanish subsidiary, Elsamex, has been executing road projects across three sites in Ethiopia. The IL&FS group had defaulted on paying both taxes and local employee pensions. Last November 25, local workers of ITNL Ethiopia took hostage seven Indian employees demanding pending salaries.

Of the seven, three employees were released and had returned to the country in December 2018 and January, the company had said in a statement. The rest of the employees were rescued and returned to the country last month..