Speaking to The Financial Express, executive director (finance), T Anantha Narayanan said that the company had raised Rs 90 crore last week in the bond market at a coupon rate of 12.5 per cent for three-year tenor and paid back loans carrying interest rates in the range of 16 to 17 per cent. During 1998-99, the company had incurred an interest cost of Rs 130.49 crore on loan funds (both secured and unsecured) aggregating Rs 962 crore. Debentures amounting to Rs 462 crore, commercial papers to the tune of Rs 100 crore, loans from banks and financial institutions form the major chunk of thedebt basket. The company had posted a net profit of Rs 20.37 crore in 1998-99.

Debentures worth Rs 150 crore are slated for redemption during the current fiscal and the company, according to Anantha Narayanan, has decided not to re-issue the existing debentures or go for a fresh issue but redeem it out of internal accruals. The company has powers to re-issue debentures to the tune of Rs 105.34 crore.

By redeeming the debentures, the overall debt position of the company would be about Rs 800 crore. The decision to redeem debentures out of internal accruals stems from the much improved scenario in the commercial vehicle industry. ALL's sales in the current fiscal has been 25 per cent higher both in terms of value and numbers compared to that of the previous years. The company expects to end the year with a cumulative increase in sales volume of about 20 per cent.

Moreover, the credit period is also beginning to contract with the demand picking up. As against the earlier credit period of 75 days truckcompanies have now managed to reduce it to 60 days. This has appreciably improved the cash flow situation.

Higher capacity utilisation would result in increased working capital requirements but the company has unutilised cash credit limits to fall back on, Anantha Narayanan said. He also said that the company will enter the bond market, later in the year, to raise resources for capital expenditure to the tune of Rs 100 crore. It also plans to raise about Rs 50 crore to fund deferred sales receivables.