REC Limited to provide long-term financial assistance to KIAL

REC Limited, a public sector enterprise under the Ministry of Power, has entered into a significant financial partnership with Kannur International Airport Limited (KIAL). The agreement, executed on September 25, by Dinesh Kumar C., Managing Director, KIAL, and M. Uday Kumar, chief programme manager, REC Limited, Thiruvananthapuram, aims to provide long-term financial assistance to KIAL.

Mr. Dinesh Kumar said the arrangement would unlock new avenues of growth for the airport, reduce borrowing costs, and enhance the overall experience for users of the airport. He added that KIAL’s previous financing, structured by a consortium of South Indian Bank, Canara Bank, and Federal Bank, had a repayment term of just 11 years, which was insufficient for a capital-intensive project like the Kannur airport.

KIAL had been in discussions with REC Limited, a Maharatna company and a registered non-banking financial company (NBFC) with the Reserve Bank of India. The final agreement, extending over 21 years, will allow KIAL to restructure its debt, thereby reducing the financial burden.

With the partnership, REC Limited will take over the entire outstanding loan of KIAL, easing its repayment stress. REC Limited, which manages assets worth approximately ₹5.3 lakh crore, has a proven track record in infrastructure development and modernisation across India.

KIAL operates a world-class international airport, serving as a crucial gateway for north Kerala, Tamil Nadu, and Karnataka. The new financial backing from REC Limited is expected to accelerate its growth and expansion.

Published - September 27, 2024 10:05 pm IST