The companies are either going for distress sales to encash the bonds at a discount of 5 to 7 per cent, or borrowing for working capital requirements from banks. The additional borrowings that began towards the close of financial year 2007-08 will have a negative bearing on the balance sheets, it is feared.
IFFCO and NFL are the major recipients of the Rs 7,500 crore worth of bonds issued by the government towards pending fertiliser subsidy bills. The bonds were issued in two tranches in December 2007 and February 2008.
IFFCO, the largest fertiliser player in the country, alone had received Rs 1,676 crore as fertiliser bonds.
While the company managed to sell the first tranche of bonds worth Rs 1,030 crore at a loss of 1.5 per cent, it was not that lucky with the second instalment of Rs 646 crore. The heavy discount (5-7 per cent) at which the bonds are being traded has compelled IFFCO to hold back the balance.
According to senior IFFCO officials, the company is arranging additional borrowings to meet the running costs.