Ceat Tyres has been granted six months deferment to disburse the second instalment of the secured redeemable partly convertible debentures payable to Life Insurance Corporation of India (LIC). However, the company will have to pay a higher rate of interest at 18 per cent per annum during the deferred period.
The company was to pay Rs 42 lakh to Life Insurance Corporation as the second instalment of the total Rs 2.70 crore on March 27, which Ceat can now make before September 27.
A faxed questionnaire to Ceat seeking the reasons for the reschedulement of its dues evoked no response.
The decision to defer the repayment date was taken by the investment committee of LIC during a meeting held sometime early this year.
Ceat posted encouraging results during fiscal 1997-98 by clocking a 108 per cent increase in the net profit.
Net profit for the year stood at Rs 13.75 crore against Rs 6.60 crore recorded during the previous fiscal.
Sales was at Rs 961.90 crore compared with Rs 947.29 crore the year before. The board has recommended a dividend of Rs 2 per share. The company margins improved following the depressed prices of raw materials, natural rubber and carbon black.
The Foreign Investment Promotion Board (FIPB) had earlier cleared the Goodyear proposal to take over South Asia Tyres, the joint venture between Ceat and Goodyear.
The two parties held 50 per cent equity each in the joint venture company.
