The Hindu Business Line : India Cements to explore steps to reduce cost of debt

INDIA Cements Ltd will continue to look at steps to infuse fresh money into the company to reduce the cost of debt and to bring down the number of lenders, according to Mr N. Srinivasan, Vice-Chairman and Managing Director, India Cements.

Addressing shareholders at an extraordinary general meeting here on Monday, he said the cement industry was looking up and prices were getting stabilised. Even in the South, the company's major market, the "supply overhang" was getting extinguished. Given the prospects of better operation and better financial performance, the efforts being taken by the company would see it going back to the days when its finances were healthy, he said.

The shareholders approved resolutions to increase the authorised capital of the company from Rs 225 crore to Rs 275 crore; issue equity warrants and optionally convertible debentures to Asia Debt Recovery Company on private placement basis to raise Rs 655 crore; increase the borrowing powers of the board of directors to Rs 2,500 crore; and mortgage its movable and immovable properties to 16 banks and institutions.

Mr Srinivasan told the shareholders that the company would use the money to reduce its debt and to go in for a one-time settlement with those lenders who were ready to accept it.

Later, he told Business Line that there was no proposal now to bring in more funds (than what the shareholders had approved), but that was an option the company would look at.

It may be recalled that company's board approved in December 2004 a preferential issue of equity warrants and optionally convertible debentures to raise money to pay back part of its Rs 1,855 crore debt.

On conversion of warrants and debentures, India Cements' equity capital would increase from Rs 139.55 crore to Rs 177.95 crore.

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