Homegrown auto major Tata Motors plans to buy back non-convertible debentures (NCDs) aggregating Rs 450 crore ahead of their scheduled maturity as part of its plans to restructure debt.
A meeting of the board of directors is scheduled to be held on January 18 to consider and approve buyback of unsecured NCDs of two tranches, the company said in a BSE filing.
The first tranche of unsecured NCDs totaling Rs 200 crore is due to mature on November 30, 2018, while the second tranche of Rs 250 crore is due to mature on May 28, 2019, it added.
The company said the step is "part of its debt restructuring programme to ensure balanced maturity profile and/or better terms that would lower cost of debt".
After successfully completing a rights issue raising Rs 7,490 crore, the company's net debt-to-equity as on March 31, 2015 on a proforma basis stood at 0.57.
As per its annual report for 2014-15, as on March 31, 2015, the company's borrowings, including short-term debt, were at Rs 73,610.39 crore.
(REOPENS DCM 4)
Meanwhile, sources close to Cyrus Mistry hinted that the unions' support to Tata may be the fallout of a move by the ousted Tata Sons chairman to include productivity-based parameters in the agreements with the bodies, which would have been a first for the company.
"The aim was to establish a greater linkage between remuneration and performance. Employees could even end up earning more than before under the new structure," they said, adding this could have had a direct impact on the wages for the company's 50,000 strong workforce.
They said the negotiations were at the final stages of agreement and alleged that at the meeting between the union leaders and Tata at Cuffe Parade last week, the latter had promised to renegotiate a better settlement for the unconditional support.
The sources alleged that Tata has "promised a more than generous wage hike" to their labour unions to garner their "unconditional support" in the Tata-Mistry feud.
They questioned if such a move will be in sync with the company's compensation policy and the restructuring exercise undertaken, and if the decision to increase the wages taken in consultation with the board of the company.
They also wondered what would be the financial ramifications of such a deal.
