Tata Chem Sews Debt Rejig, Repays Rs 224 Crore

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 224 crore, at present stands at Rs 1,146 crore against Rs 1,370 crore as on March 31, 2000.

From the remaining debt, interest rate on a sum of Rs 164 crore 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 5 crore, 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 162.16 crore against Rs 184.19 crore 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 today, this translates to a dividend of 10.6 per cent.

Meanwhile, Tata Chemicals has received an adhoc amount of Rs 10 crore 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.