Ford Motor India is understood to be in talks with existing investors to replace its high-cost loans with fresh debt at lower rates.
The company had raised about Rs 200 crore (Rs 2 billion) through two debenture issues in 1999 and 2001 at interest rates between 9 per cent and 12 per cent.
The automobile major is learnt to have retired close to Rs 50 crore (Rs 500 million) worth of high-cost debt and is in talks with banks and institutions to restructure the rest of its portfolio.
Ford India officials said the move is a part of the company's routine financial operations. The restructuring also comes in the wake of the recent Securities and Exchange Board of India's order on investments by banks and institutions in debt instruments of corporates.
Ford India also indicated that it had reached a level of comfort in terms of its turnover and is looking at Rs 1,000 crore (Rs 10 billion) turnover for the current fiscal.
The company, which launched its competitively priced sports utility vehicle Endeavour, is expected to start deliveries by the first week of December.
The Endeavour is expected to fare better because of its aggressive pricing and give similar offerings such as Suzuki's Grand Vitara, Hyundai's Terracan, GM Forrester, Honda CR-V and the Mitsubishi Pajero a run for their money. Ford has priced the Endeavour at about Rs 12.90 lakh (Rs 1.29 million), ex-Delhi.
The Endeavour comes with anti-lock braking systems and dual air-bags. Built at the Ford's Maraimalai Nagar plant, near Chennai, the SUV has about 20 per cent local content, which will be ramped up further with growing volumes. Offered in a 4X2 version, with a 4X4 option, the Endeavour is sold in Thailand.
Since January 2003 more than 900 SUVs have been sold in India and the Honda CR-V has been a runaway success with sales of about 400 units since its launch this year.
Hyundai has sold about 100 plus units of its Terracan, while Pajero has sold about 135 units, the Grand Vitara about 140 odd units and the Forrester about 130 units. Since most of the SUVs were launched this year there is no year-on-year benchmark available.
Further, Ford India also indicated that it will usher in its common rail direct injection diesel technology.
David Friedman, president and managing director, said the company will offer the technology in its diesel cars when Euro III emission norms come into effect in the country from April 1, 2005.
"We have the relevant technology but are concerned that fuel quality may not measure up. It is not a question of introducing CRDI but the government has to ensure that the technology is not hampered by fuel quality."
CRDI helps in better efficient fuel consumption, more power and lesser emissions in diesel engines. At present, only Daimler Benz and Hyundai Motor offer CRDI in their diesel engines in India.
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