Indo Gulf Prepays Rs 70 Crore Loans In Debt Recast Move

Indo Gulf Corporation, the AV Birla group company, has undertaken a debt restructuring exercise to prune its interest costs.

The company has pre-paid high cost loans worth Rs 70 crore and is in the process of repaying another Rs 20 crore, which have now fallen due.

Senior executives at Indo Gulf said, "We have paid off around Rs 90 crore worth long-term rupee loans in the recent past, which includes prepayment as well as repayment. Currently, the average cost of borrowing of our company stands reduced to 10 per cent compared with 12.5 per cent earlier."

The interest outgo of the company during the second quarter stood reduced by almost 14 per cent to Rs 34.71 crore against Rs 40.13 crore during the corresponding quarter last year.

The total debt of the company for the year ended March 31, 2001, was at Rs 1,146.37 crore out of which secured loans accounted for Rs 808.42 crore.

At the beginning of the current fiscal, the total long-term rupee loans from financial institutions and banks stood at Rs 209.04 crore. The loan was taken for the copper unit of the company.

Indo Gulf is looking at minimising its internal costs. With London Metal Exchange prices, as well as the treatment charges/refining charges rates ruling at very low levels, coupled with uncertainties in the fertiliser policy, the company has sharpened its focus on cost-cutting.

While the company's outlook on copper is positive, it feels the fertiliser sector will grow at an estimated rate of 6 per cent annually considering the good monsoon during the current year.