Rallis To Whittle Down Debt By Rs 200 Crore

Rallis India, the agrochemicals arm of the Tata group, plans to reduce its total debt by nearly Rs 200 crore, or almost 40 per cent, as part of its strategy to improve profitability.

The company's CEO and executive director Rajeev Dubey said: "We have several high-cost loans on our books. We intend to retire some of them and refinance other to bring down interest costs."

The company has already retired Rs 78 crore of out of the outstanding Rs 540 crore, that has reduced interest charges by Rs 9.6 crore, Dubey added.

Rallis' vice president-finance Soumen Mitra said: "We would like to retire another Rs 122 crore by the end of the current year and bring down the total debt to around Rs 340 crore."

He said the repayment would not be out of the company's proceeds from sale of non-core assets -- the pharma division and real estate properties -- but from cash generated out of its operations.

"Our average cost of borrowings is around 13.5 per cent, but we can borrow at the 10 per cent levels. Our eventual aim will be to bring down the cost of funds to that level," Mitra added.

The total debt of the company as on March 31, 2001 was Rs 428.09 crore. In keeping with its policy of retiring high cost debt, Rallis paid back Industrial Investment Bank of India (IIBI), a loan of Rs 20 crore, on August 16.

The company has borne an interest burden of Rs 14 crore to Rs 15 crore this first quarter which is down by Rs 4.2 crore.