An Indian businessman has turned to letters of credit (L/Cs) to raise finance for his company as more exotic financing options apparently become more difficult to secure amidst uncertainties in the global financial markets.

The uncertainties have hit India's market for foreign currency convertible bonds (FCCBs) through which dozens of companies were going to raise finance.

Plans shelved

A majority of the nearly 50 companies, which have so far announced their plans to raise funds through FCCBs during 2008, have decided not to go ahead for now, according to media reports. Some of them have put plans on hold, even after gaining shareholders' approval to do so.

One such business is Binani Cement. It will not go ahead with its US$125-million FCCB but will now borrow the equivalent amount from banks to meet its capital requirement instead.

L/C option

Construction company Jyoti Structures meanwhile has decided to put its US$25 million FCCB on hold.

Jyoti wanted to raise the funds to buy construction equipment, but the company's managing director told local media that the firm had now organised to raise an equivalent amount against L/Cs from financial institutions.

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