SPC Warburg likely to be financial advisor for Utkal Alumina project

According to the source, the debt component ofthe project is one of the most crucial items which is being studied in great detail. The first step would be for the financial advisor to seek information on various overseas lending terms and conditions. This would include a comparative statement of the lenders which should be most tangible to the promoters, said the source.

A study of this would be followed up by determining the amounts of indigenous and foreign loans and then either a syndicated or a consortium arrangement would be chosen. "The finalisation of the term sheet would be the binding factor of a borrowers agreement, which would essentially mean the access of funds by the promoters on the basis of a mutually agreed statement," the source added. According to the source, various issues of the project were deliberated upon at a high-level meeting in Oslo late last month where Ratan Tata, Tapan Mitra, along with the presidents of Norsk Hydro, Alcan and a host of officials had come together.

The forthcoming Mumbai meeting would discuss variousissues relating to disbursement of loans which would comprise details on the period of the loan, any prepayment terms that could fetch better returns and also the case of currency swapping. Other issues relating to the level of comfort in terms of raw material offtake, confidence relating to loan repayment and various factors would be discussed. One of the key issues that would be taken up at the next meeting would be a study of the joint venture agreement in great detail. This would be crucial as repercussions will have to be weighed if one of the joint venture partners plan to pull out of the project.