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Ispat, UTI Asset Mgmt arrive at loan settlement

Our Bureau

Mumbai , April 9

ISPAT Industries Ltd has informed the BSE that it has arrived at a settlement with UTI Asset Management Company Ltd on its outstanding loan of Rs 584.54 crore.

The terms of the settlement, approved by Ispat's board, entails paying the entire principal amount of Rs 344.75 crore and 81.21 per cent of the simple interest of Rs 239.79 crore amounting to Rs 194.74 crore.

In the process, UTI waived Rs 125 crore, which is the compound interest and penal charges on the debt.

Ispat said it has already made an upfront payment of Rs 55 crore and the remaining through 35 monthly instalments, though not equated. The rate of interest for this has been set at 8 per cent, down from 18 per cent when the loan was procured.

This settlement is expected to reduce interest outgo to the extent of Rs 50 crore annually, a company spokesperson said.

At the end of March 2004, Ispat had an outstanding debt of Rs 6,800 crore. A substantial portion of this has been settled with the lenders under the corporate debt restructuring package.

The UTI loan was outside the package. During the 2004-05 fiscal, the company may have repaid up to Rs 600 crore to various lenders, an official said.

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