Apollo Tyres announced that it has successfully closed a $300 million (Rs 2,260 crore) to finance the development of its Greenfield plant in Hungary. The company raise the capital from a consortium of banks that included ABN AMRO Bank N.V., Magyar Export-Import Bank Zrt., Raiffeisen Bank Zrt., Unicredit Bank Hungary Zrt. and Standard Chartered Bank.
ABN AMARO Bank N.V. handled the documentation on the facility while Raiffeisen Bank Zrt. was the facility and security agent. K Prabhakar, Managing director of Apollo Tyres said, “We thank our consortium partners who provided appropriate solutions to the specific financing needs for the project and facilitated a smooth execution.”
The Greenfield plant is located less than 100km from Hungary’s capital Budapest and will be constructed with a total investment of around $475 million. The construction at the site began in April 2015. The first tyre from the facility is expected to roll out sometime in early 2017. The facility will provide employment to around 1,000 people.
In an earlier statement, Chairman of Apollo Tyres OS Kanwar said, “We are the first Indian tyre company to set up a green-field overseas (Hungary) where the production is expected to commence by 2017 that would make us more competitive in the highly-profitable European markets and our truck-bus radial capacity in Chennai is being increased to 12,000 tyres per day from the current 6,000 tyres.”
The production capacity of the plant per annum is 5.5 million tyres for the passenger cars and light trucks and 675,000 tyres for the commercial vehicles.
Apollo Tyres already has a plant in Netherlands and now this upcoming plant in Hungary will complement it. Both of these facilities will make substantial contribution in bringing Apollo and Vredestein brands in the European market.