Steel Authority of India Ltd (SAIL) has brought down its market borrowings to a level of Rs 14,200 crore as on June 30, 2001, a decline of Rs 944 crore in the last 15 months.
SAIL had a peak debt burden of Rs 21,000 crore on April 1, 1999, when the government had put into effect financial and restructuring plan for the company. SAIL has repaid high cost debt totalling over Rs 2,600 crore since April 1, 2000.
During 2000-01, SAIL effected debt repayments of Rs 2,100 crore, an additional Rs 535 crore was repaid in the first quarter. Most of this was high-cost debt bearing interest rates between 15-17 per cent. The company had borrowed heavily during the mid-1990s to fund its massive modernisation programme.
Besides taking advantage of falling interest rates, the company also raised fresh resources from the market to refinance a part of high cost debt. Over Rs 1,400 crore was raised in 2000-01 at an average interest rate of 12 per cent. During the first quarter of the current fiscal, SAIL raised another Rs 29 crore at an even lower interest rate of 11 per cent.
A company release said: Having shown an improvement of 60 per cent, in its financial performance in 2000-01, the company could take advantage of the lower cost of borrowing.
