Mumbai, April 2: Loans disbursed by financial institutions (FIs) for Essar Oil's refinery will be used to pay the default in the interest on its 14 per cent non-convertible debentures (NCDs). Following the delisting of Essar Oil shares from the Bombay Stock Exchange (BSE) on account of investor grievances, the company has stated that defaulted amount will be paid to the NCD holders very soon.The BSE, on March 30 had suspended trading of Essar Oil shares on the exchange as the company had failed to pay the interest on its 14 per cent NCDs. The company, in an official statement has, however, said: "Our projects have achieved financial closure. The documentation process is on and the disbursements from the FIs are expected soon. The present crises will be resolved shortly." No official statement could, however, be got from FIs.
Sources at Essar said that the interest during completion of the project will form a part of the project cost and that the disbursements expected from the FIs will be used for payment of interest.
Company sources said that most of the interest is part of the optionally fully convertible debentures (OFCD) which were issued in 1995. The total interest due for the year is Rs 94.32 crore. Also, the interest for the previous year amounts to Rs 36.16 crore. The default amount and the exact amount paid to the NCD holders are not known.
The company had issued 12.5 per cent secured redeemable OFCD of Rs 109 each consisting parts A, B and C. Part A has been converted on the date of allotment into equity shares of Rs 10 each at a premium of Rs 30 per share while part B has been converted into one equity share of Rs 10 at a premium of Rs 35 per share on August 21, 1996. Part C was converted into two equity shares of Rs 10 each at a premium of Rs 42.50 each in December 1997 at the option of the debenture holders and the remaining part C has become convertible debentures carrying interest at the rate of Rs 14 per annum.
According to BSE sources, Essar Oil had on March 7 requested for two months time for redressal of the 197 pending complaints. Subsequently the company, on March 30, informed the BSE that 100 complaints had been resolved. On Monday, the company informed the BSE that it had redressed all the balance 97 complaints also.
Sources said that Essar Oil has quickly redressed the complaints in a single month whereas the company had actually asked for two months time to address the complaints.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
