Suresh Nair

Mumbai, Nov 5: The Financial Institutions (FIs) have permitted Gujarat State Fertilizers and Chemicals (GSFC) to reduce the rate of interest on its 18 per cent non-convertible debentures to 16.25 per cent per annum, payable quarterly with effect from August 2, 2001, without any premium.

The company had issued 80,00,000 secured redeemable non-convertible debentures of Rs 100 each on private placement basis of which 70,00,000 are 18 per cent debentures which amount to Rs 70 crore, while 10,00,000 debentures have a coupon of 14.5 per cent.
The company, in the current fiscal is expected to redeem debentures of Rs 57.14 crore. The debentures are to be redeemed in three equal installments commencing March 2002, that is five years from the date of allotment.

The company, in the current fiscal, has floated non-convertible bonds of Rs 100 crore on private placement basis for which the company received subscription of Rs 83.50 crore.

The bonds have been raised with a view to raise finances partly for the di-ammonium phosphate (DAP) expansion project at Sikka, modification schemes in the existing plants and augmentation of long-term working capital.

The company is also in the process to borrow another Rs 150 crore by issue of NCDs and term loans on private placement basis or other conducive borrowings. The company will also raise Rs 50 crore to finance its working capital requirements from Gujarat State Financial Services (GSFS).

The company has had to make these borrowings to reduce the pressure on the company’s liquidity. The company has been constrained of funds on account of sluggish market conditions, recovery from Fertilizer Industry Co-ordination Committee (FICC), repayment of existing loans, redemption of debentures and preference shares, and also for the DAP expansion plan.

The outstanding borrowed funds as on March 31, 2001 stood at Rs 1,519.70 crore, which is Rs 13.02 crore higher over the previous year.