CESC to pay Rs 500 cr to lenders for 4 yrs

CESC Ltd, the RPG-owned power utility, from this fiscal onwards will pay nearly Rs 500 crore for the next four years to its long-term lenders.

The principal repayment on advances to Industrial Development Bank of India (IDBI), ICICI Bank and Life Insurance Corporation of India (LIC) and some other lenders will be Rs 720 crore. Interest on loans will be repaid.

CESC recently achieved savings on interest as a result of reduced rates arrived at through the corporate debt restructuring (CDR) cell.

CESC will pay creditors an interest of Rs 350 crore against Rs 400 crore which was the interest prior to the CDR.

Loans availed in 1994 were converted into non-convertible debentures at the CDR, with redemptions starting in 2004-05. CESC will shell out around Rs 160 crore a year for the next four years as principal payment, and Rs 100 crore in 2008-09 "" the fifth year.

CESC officials said debentures now had to be redeemed as part of the principal repayment on long term loans availed. Thus, the outgo to banks would go up.

The debentures being redeemed had two components.

The chunk of redemption will be on 479 debentures of Rs 1 crore each, availed as term loan way back in 1994.

These debentures now carry a coupon rate of 13 per cent, which will also will have to be redeemed at 20 equal quarterly installments.

The debentures were allotted by CESC as per the terms of the debt restructuring by converting a part of the outstanding debt into debentures.

The second component comprises three debentures with coupon rate ranging from 12.73 per cent to 13.5 per cent "" the total value of which stands at Rs 241 crore. The repayment of these debentures starts this year and will be paid in 16 equal quarterly instalments.