In a move that will slash returns for a few lakh investors, the Gujarat government-backed Sardar Sarovar Narmada Nigam Ltd (SSNNL) has said it would prepay high cost 20-year bonds to save about Rs 6,100 crore.
To get the consent of the investors, the company has called a meeting on May 28 as the 17 per cent interest bonds, issued in January 1994, did not provide for pre-mature redemption by the issuer.
In case SSNNL fails to get the consent of bond-holders for early redemption, it would have to bear a burden of Rs 7,800 till 2014, managing director SK Mohapatra told PTI on phone from Gandhinagar, adding that pre-payment in the 11th year would cost only about Rs 1,700 crore.
“We have sent notices to bond-holders about the meeting to amend the conditions of the bond so as to obtain the call option and redeem the bonds in 11th year,” Mr Mohapatra said.
He said the company hoped to redeem the bonds at Rs 25,000 in January 2005 subject to the approval of bond-holders. The company had sold the deep-discount bonds at Rs 3,600 per unit in January 1994, promising to repay Rs 1,11,000 in January 2014. This would entail a cash outgo of about Rs 7,800 crore.