Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel
July 25, 2001
|
|
|
|
|
|
||
|
Channels: Astrology | Broadband | Contests | E-cards | Money | Movies | Romance | Search | Wedding | Women Partner Channels: Bill Pay | Health | IT Education | Jobs | Technology | Travel |
||
|
|
||
|
Home >
Money > Reuters > Report July 25, 2001 |
Feedback
|
|
|
IFCI says will repay bondholdersIndian state-run development financial institution IFCI Ltd, viewed by some debt traders as having defaulted on certain bond repayments, said on Wednesday that it had a temporary cash flow mismatch. "There is no liquidity problem, there is a cash flow mismatch," IFCI chairman and managing director P V Narasimham said when asked to respond to market speculation his firm had defaulted on some payments. "There is a call option on some bonds which we have exercised and the option falls due on July 15," he said. "We have repaid about half of this and we are in discussions with two major investors who are holding the rest. We have asked them to reinvest the funds with us in fresh issues. If they choose not to do so, we will repay the amount in full with due interest from July 15," he said. This request to investors to reinvest sparked the market talk of default, since technically the company had not made payment on the due date after exercising a call option. Narasimham said the repayment obligations of IFCI in the current month were much higher than normal as it wanted to exercise options to repay some high cost borrowings made in the past. "In this month itself we have Rs 7.18 billion of normal repayments and in addition, there are Rs 4.20 billion of high cost borrowings which we are repaying," Narasimham said. "We are exploring the possibility of investors re-investing at lower rates. If they don't, we have to repay the loans," Narasimham said. IFCI shares were down 1.6 per cent at Rs 3.05 in afternoon trade on the BSE, while the Sensex was down 0.77 per cent. IFCI is India's first development financial institution and was set up in 1948 to provide credit to medium and large industry. The Industrial Development Bank owns 31.7 per cent in IFCI. The remaining stake is held by state-run insurance companies, the country's largest mutual fund manager Unit Trust of India, banks and public shareholders.
|
||||||
