UTI waives Rs 18.4 cr Indian Seamless dues

The Pune based Indian Seamless Metal Tubes (ISMT) and Indian Seamless Steels and Alloys Ltd. (ISSAL) have jointly negotiated a settlement with Unit Trust of India (UTI) for its outstanding debts.

As per the settlement, ISMT and ISSAL have obtained a waiver of Rs 18.4 crore outstanding debts. This waiver includes 70 per cent of simple interest due from ISSAL and 50 per cent due from ISMT. In addition, UTI has waived 100 per cent of overdue and penal interests.

The total amount payable would be Rs 30.8 crore as against Rs 49.3 crore. This amount is to be paid over a period of one year beginning July 2005 and carries an interest rate of 8 per cent per annum which is lower compared to 11 per cent under the CDR and 14 per cent charged by UTI.

Mr. Rajiv Goel, Executive Vice Chairman, ISMT Ltd. said "This is one of the first major steps that we have taken to reduce the debt apart from the CDR package that has already been sanctioned. In the current financial year, the combined entity would repay Rs. 23 crore as envisaged in the CDR schedule and we further expect to reduce the debt by a minimum of Rs. 35 crore out of internal accruals. The total secured debt thus would stand reduced by over Rs.100 crore to Rs. 430 crore - an 18 per cent reduction and would result in an interest saving of about Rs 10 crore. We, also, plan to further reduce the cost of the residual debt and accelerate the repayments which we believe will have a positive impact on the bottom-line"

The ISSA achieved turnover of Rs 803.02 crore during the year ended March 2005, up 52.39 over the sales of Rs 526.96 crore achieved in the previous year.

The company earned net profit of Rs 50.74 crore in 2004-05 against Rs 1.61 crore in 2003-04. The ISMT achieved sales of Rs 494.46 crore in 2004-05 (Rs 454.31 crore) and showed lower net loss of Rs 8.20 crore (net loss of Rs 13.98 crore).