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Our Bureau

Chennai , Aug. 1

MADRAS Fertilizers Ltd has informed the stock exchange that the Centre has approved the proposal for reduction in interest on outstanding loans amounting to Rs 219.97 crore that it owes to the Government.

The interest has been brought down to 7 per cent from the average document rate of 15.10 per cent. The company has also been allowed to repay from 2004-05 the loan in 10 equal instalments. The proposal was a part of the financial restructure package involving waiver of outstanding interest and penal interest on loans up to March 31, 2003.

It may be recalled the Government had cleared the debt restructure in mid-July and waived over Rs 70.65 crore in interest and penal interest up to March 2003.

The company is also banking on a capital debt restructure with the financial institutions and banks involving waiver of penal interest and softening of interest rates to 8-10 per cent from the prevailing 13.5 per cent.

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