Search the Internet          Tips  Sites: Finance, Investment

Tata Chem sews debt rejig, repays Rs 2.24 billion

Rumi Dutta

Tata Chemicals has concluded its debt-restructuring programme involving prepayment of high cost loans and replacing them with low-cost ones.

The total borrowings of the company, after repaying Rs 2.24 billion, at present stands at Rs 11.46 billion against Rs 13.70 billion as on March 31, 2000.

From the remaining debt, interest rate on a sum of Rs 1.64 billion has been restructured to 13.75 per cent against the previous 18.5 per cent.

B P Chinoy, controller of finance, Tata Chem, said, "We have agreed to pay the lenders Rs 50 million, which is 50 per cent of the present value of the difference in the previous and the current interest rates." The average cost of debt after the recast is now around 13 per cent.

The interest cost for fiscal 2000-01 has dropped by 12 per cent to Rs 1.62 billion against Rs 1.84 billion in the previous year. Accordingly, the interest coverage ratio of Tata Chemicals now stands at 3.52 per cent (3.12 per cent).

Despite a difficult year, the company has declared a dividend of 50 per cent. As the Tata Chemicals scrip closed at Rs 46.75 Wednesday, this translates to a dividend of 10.6 per cent.

Meanwhile, Tata Chemicals has received an adhoc amount of Rs 100 million from insurance companies against its claim for losses due to the recent fire at its manufacturing unit in Mithapur, Gujarat.

"We are in the process of negotiating with insurers and the final settlement is expected to be over by September this year," Chinoy said. He, however, refused to divulge the exact claim but said the company is fully insured.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report