Mumbai: Tata Chemicals has raised $850 million in loans to help fund its $1 billion acquisition of US soda-ash maker General Chemical Industrial Products.

The loan has been arranged by a consortium of banks comprising ABN AMRO, Bank of Nova Scotia, Calyon, HSBC, Mizuho Financial Group, Rabobank  and Standard Chartered, the source said.

The funding has a $500 million part in seven-year loan at 1.35 percentage points over LIBOR and a $350 million in six-month bridge loan, sources at banks involved in the deal said.

Tata Chemicals would announce details of the financing deal by this week after regulatory approval for the acquisition, managing director Homi Khusrokhan said.

Tata Chemicals expects to achieve financial closure of the acquisition in the next couple of days he added said.

"We will be announcing the closure of the deal in two-three days, only then I'll be able to provide details of the funding," he said.

The acquisition of General Chemical will give Tata Chemicals access to low-cost natural soda ash reserves and a presence in the North American market.

The acquisition will also make Tata Chemicals the second largest maker of soda ash in the world.

The company currently produces 875,000 tonnes of soda ash annually and plans to raise the output to 1.2 million tonnes by optimising use of its current capacities in Mithapur, Gujarat, and Kenya.

Tata Chemicals is also setting up a $500 million soda ash manufacturing plant in Tanzania.
The modalities of setting up the plant, to be located in the northern part of the country, has been worked out, said Tanzania's minister for industries, trade and marketing Mary Nagu. (See:Tata Chemicals acquires General Chemical Industrial Products for $1 billion)