Ispat to retire $122 million bonds at 75% discount

Ispat Industries has reached an agreement with its bond holders to retire its $122.16 million euro convertible bonds at a 75 per cent discount.

The company will pay back only $34.21 million to its bondholders, who gave their approval for the settlement on Thursday at a meeting held in London.

Anil Sureka, director, finance, Ispat Industries, said: "This is a part of the restructuring exercise the company is undertaking to reduce debts."

The company will be paying out the settlement amount in five quarterly installments, beginning this quarter, he added.

The settlement amount will carry an interest from April, 1, 2004, at the rate of a three-month, London inter-bank offered rate plus 1.5 per cent.

The company will make the quarterly payments to the bondholders from the trust and retention account. The retirement of the bonds will reduce Ispat's outstanding debt of around Rs 6,000 crore by Rs 460 crore, Sureka said.

The repayment of the euro bonds also removes the foreign debt component from the company's total debt.

The euro bonds, which were listed on the Luxembourg Stock Exchange, attracted an interest of $14.66 million, taking the total outstanding amount to $136.86 million.

Ispat had issued the euro convertible bonds in 1994. The bonds were due for repayment in April 2001, which the company was unable to meet.