A summary of the sources and uses of funds is shown in the table below:
• The leverage ratio of debt to equity is 1.25:1.
• An annual fee of 45.99 percent of the gross revenue is paid to the AAI. This amount was bid by DIAL as part of the competitive tendering process.
• An annual performance fee is payable to airport operator Fraport.
• DIAL has arranged a 17-year commercial debt split between the Indian domestic bank group (75 percent) and external or foreign debt (25 percent). This split is to reflect the mix of DIAL's revenues between local and foreign currencies and is part of DIAL's foreign exchange risk management. Because a proportion of DIAL's revenues are in foreign currencies, the inclusion of external commercial borrowings creates a natural hedge.
• The concession contract prevents DIAL giving security to lenders over the core airport assets, but it can be given over non-core assets. Lenders can take security over the shares in DIAL.
Table 1
Source of funding | Amount | Use | Amount |
Equity and internal accruals | Rs 25.00 billion | Capital costs | Rs 80.26 billion |
Commercial debt (Rupee and ECB) | Rs 49.86 billion | Preliminary expenses | Rs 6.72 billion |
Lease payments from commercial development | Rs 27.39 billion | Upfront payments to AAI* | Rs 1.96 billion |
|
| Financing costs | Rs 6.68 billion |
|
| Contingency | Rs 6.63 billion |
TOTAL | Rs 102.25 billion |
| Rs 102.25 billion |
Note: The total of RS 102.25 billion converts to circa US$1.9 billion (November 2010). * An upfront fee of Rs 1.5 billion, together with payment for capital works in progress | |||