The Hindu Business Line : Ashok Leyland to borrow $250 m from overseas market

Chennai June 5 Ashok Leyland will raise $250 million (Rs 1,100 crore) through the ECB-route. "We will hit the market within a week," the company's Executive Director-Finance, Mr K. Sridharan, told Business Line on Tuesday. The money would be used to finance the company's capital expansion projects at Ennore and Uttaranchal, he said.

Mr Sridharan said that the company foresaw no drop in sales even in the goods segment. Ashok Leyland released its May figures today, which indicate a drop of 17 per cent in the goods segment, even as the total sales — buoyed by bus purchases by State governments — were up three per cent.

The company sold 2,079 buses (including 224 exported) in May, against nil in the same month previous year.

Goods segment

Mr Sridharan believes that the drop in the goods segment is due only to deferment of purchases because of an anticipated drop in interest rates.

He says that this belief is reinforced by the fact that the freight exchange that Ashok Leyland runs shows a shortage of trucks.

Besides, freight rates are good and there is no shortage of cargo.

He said that April-May are dull months anyway.

The drop appears to be sharp this time also because the effect of the Supreme Court's ruling against overloading was felt more in April-May last year — in the immediate aftermath of the ruling, people bought more trucks.

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