The Hindu : RINL to be debt free by 2004

Online edition of India's National Newspaper
Saturday, Sep 21, 2002

Business

Business

RINL to be debt free by 2004

By Pratim Ranjan Bose

KOLKATA SEPT. 20. Rashtriya Ispat Nigam (RINL) is set to pre-pay the entire Rs. 1,160 crore high cost loans by the next fiscal. The high cost debts result in an annual interest outgo of about Rs. 350 crores. The company had earlier planned to repay the loan by 2007. Of the total loan portfolio, about Rs. 900 crores is payable to UTI and LIC.

The high cost loan, mostly accrued due to time and cost overrun during the commissioning of the project, was one of the root causes for the company's recurring losses. The Centre had already written off Rs. 2,385 crores of interest on Government loan during the last capital restructuring in 1998.

Talking to The Hindu, B. K. Singh who is temporarily officiating as managing director (in addition to his original assignment as managing director of Bhilai Steel Plant of SAIL), said almost all of the Rs. 700 crore cash profit that RINL was expected to register in the current fiscal would be spent in repaying term loans ahead of schedule. "My plan is to make it zero debt company by 2004". Accordingly, "the company has already put on hold all investment decisions, except the capital repairs to the tune of Rs. 5-10 crores".

RINL had repaid Rs. 155 crores to UTI partly by swapping through Rs. 100 crore short term loan from Canara Bank early this fiscal.

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