Financial Daily from THE HINDU group of publications
Thursday, Jan 03, 2002
Financial Daily from THE HINDU group of publications Thursday, Jan 03, 2002 |
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Corporate
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Announcements NTPC to partly prepay Govt loan Balaji C. Mouli Shaji Vikraman
NEW DELHI, Jan 2 NATIONAL Thermal Power Corporation (NTPC) has decided to prepay part of the relatively costly loans aggregating Rs 500 crore borrowed by it from the Government over a decade ago. The thermal power generation company has sought the approval of the Finance Ministry to prepay part of the loans taken by it between 1980 and the early 1990's. NTPC had on its books loans from the Union Government aggregating Rs 2,474 crore at the end of March, 2001. These loans have a maturity of 15 years on an average. The prepayment of the loan is expected to result in considerable savings on interest cost as these rupee loans were given to NTPC at a fixed interest rate of 15 per cent. There are indications NTPC would initiate a similar exercise to prepay part of the loan contracted by it from the World Bank. The Finance Ministry has been encouraging state-owned companies to prepay their costly foreign currency borrowings, especially in the context of comfortable foreign exchange reserves and also the softening of domestic interest rates. The Government has already signalled its intention to prepay up to $1 billion from the portfolio of the World Bank loans. This is expected to be executed before the end of this fiscal. Over the last few years, as part of its debt management strategy, the company has been pre-paying part of its relatively expensive foreign currency loans. In the 1980's, NTPC had accessed foreign currency funds especially from Japanese banks and institutions. Last year, NTPC prepaid the Japanese yen-denominated loan to the tune of 5 billion by taking a fresh syndicated loan at a fixed rate of interest
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