The FIs have granted relief and concession in respect to the rupee term loan of Rs 340 crore disbursed to the company, institutional sources said.

The FIs have decided to fund simple interest on term loans amounting to Rs 244.80 crore. The funded interest will be payable in installments spread over three years, commencing 2004. The loans have been approved at an interest of 12 per cent per annum. FIs will also reduce the rate of interest on the entire term loan which was extended to RINL, earlier. The company has also got an extension of the moratorium for repayment of loans. The repayment of loans were originally scheduled to begin from April 1, 2000.

This has now been extended to 2003.The FIs have also deferred the payment of compound interest and liquidated damages accrued up to March 2000, amounting to Rs 70.31 crore. The payment of the compound interest and liquidated damages will now be paid after March 2007. The central government had, in a capital restructuring plan for RINL, envisaged conversion of Rs 791 crore interest-free loan to 7 per cent non-cumulative redeemable preference capital redeemable after 2001.

The capital restructuring also approved for conversion of Rs 542.47 crore of loan advanced to RINL from 1993-94 to 1995-96, into 7 per cent non-cumulative preference capital redeemable after 10 years. The restructuring was done following the government's approval of capital restructuring and providing financial relief to public sector undertaking.

Several representations were made from members of parliament seeking expeditious action in obtaining approval of the government on capital restructuring of the capital base of RINL. The undertaking had recorded a huge loss of Rs 419.40 crore for 1997-98 (provisional), while losses in the earlier year amounted to Rs 254.94 crore. The turnover in 1996-97 was Rs 3,135.29. The company had picked up US management consultants AT Kearney and public-sector steel consultants Mecon to work out an organisational revamp for the country's only shore-based integrated steel plant.