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HSIIDC enhances term loan exposure limit

Written by: Staff
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Chandigarh, Aug 24 (UNI) The Haryana State Industrial and Infrastructure Development Corporation has decided to enhance the maximum exposure limit of financial assistance under its term loan scheme from Rs ten crore to Rs 15 crore for all categories of loans.

Managing Director Rajeev Arora said the enhancement had been done to compete in the liberalised finance market and to have an optimum mix of small and big projects so that the credit risk was properly balanced.

With the emergence of multinationals and large business houses, the minimum economic size of project had increased resulting into higher project cost and increased credit requirement.

Also, the companies are being compelled by the changed circumstances to set up bigger projects to achieve economy of scale thereby improving viability. Further, in view of the substantial increase in the real estate business, the Corporation has been receiving various proposals of financing commercial complexes, wherein the project cost is more than Rs 30 crore.

It was about 10 per cent of the share capital, reserves and surplus (including capital reserves). The revised exposure limit of Rs 15 crore per company for all schemes without any limit of project size works out to about five per cent of the share capital and reserves which stood at Rs 353.56 crore as on 31.3.2006. There would be, however, no change in the existing financial and other parameters under the respective schemes, he added.

Besides, normal term loan the Corporation was also extending term loan facilities under Equipment Finance Scheme, Line of Credit and Working Capital Term Loan.

In another significant decision, the Corporation had decided to relax its policy relating to leasing of industrial plots and sheds in its various industrial estates. Under the existing policy, leasing or renting of 75 per cent of the premises of the building is allowed if the allottee has remained in production for one year provided he retains 25 per cent of the premises for his own manufacturing activities.

Such permission is granted on payment of a nominal processing fee. The allottee is allowed to lease out the entire construction area if he has remained in production for one year. The existing policy also allows multiple leasing for the same plot in order to ensure optimum utilisation of the industrial land.

Under the new policy, the condition for remaining in production for one year had been relaxed. In cases, where the allottee has implemented his own approved unit on the said plot but could not continue the same due to any reasons whatsoever, leasing will be permissible by charging applicable normal fee as per Estate Management Procedure, 2005.

UNI MA BP SRS VV1736

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