Tata Chemicals Ltd (TCL) plans to raise $20 million through external commercial borrowings (ECB) as part of the company’s ongoing debt restructuring programme.  Addressing shareholders at the company’s 64th annual general meeting (AGM), Ratan Tata, chairman, TCL, said, “We will be raising $20 million through ECB at three per cent interest, which will be mainly used for swapping high-cost debt with low-cost  debt. The company has also earmarked Rs 70 crore as capital expenditure for 2003-04.” 

During 2002-03, long-term loans of Rs 191 crore were refinanced. To benefit from the low-interest rates, the portfolio of  short-term loans was constantly shuffled. The company also issued non-convertible debentures aggregating Rs 100 crore on a  private placement basis at a competitive rate, thereby, replacing one of the expensive loans. Mr Tata added, “As far as our  cement business is concerned, it remains sub-optimal because of the size and thus it is difficult to sell. In order to bring in  efficiency and greater focus on business growth, the company has been reorganised into three SBUs — chemicals, fertilisers and  food additives.” 

Regarding the amalgamation of Hind Lever Chemicals Ltd (HLCL) with TCL, Mr Tata said, “The High Court of Bombay has  already passed the order approving the scheme of amalgamation. However, the Punjab and Haryana High courts are yet to approve it. We are expecting the approval any time from now to middle of January 2004.” 

The company had earlier evinced interest in participating in the government’s disinvestment programme of fertiliser companies.  Mr Tata clarified, “As regards National Fertilisers, we decided not to bid for various reasons. However, we are looking for  various projects and means of investing and as of when opportunities come, we will make investments.”