UCO Bank reschedules UHBVN’s loan
Tribune News Service

Chandigarh, December 19
In a major relief to the cash-strapped Uttar Haryana Bijli Vitran Nigam (UHBVN), the UCO Bank has agreed to reschedule its outstanding term loan of Rs 887 crore from three years to 10 years. This was decided at a meeting between senior officials of the company and the bank here today after they discussed the detailed terms and conditions. Officials of various other banks also attended the meeting.

The UHBVN, which has outstanding bank loans of Rs 7,500 crore, hopes that other banks would also follow the UCO example.

A spokesman of the nigam said its financial crisis was mainly because there had been no tariff hike since last one decade. Besides, there was a substantial increase in coal and fuel rates to the tune of 50 per cent in this period. The nigam had also implemented the recommendations of the Sixth Pay Commission for its employees and had cleared all arrears on this account amounting to about Rs 400 crore.

The spokesman said the consolidated debt in the form of single term loan would be repaid over 10 years, including the initial moratorium of three years, on the principal amount with effect from January 2012. Interest charges with effect from January 2012 would be serviced by the nigam as and when charged. The term loan would be repaid in 84 equal monthly installments with effect from January 2015.

The bank would sanction the Funded Interest Term Loan (FITL) on all the existing term loans in lieu of interest due for the period from October to December. The FITL would be paid in 60 monthly installments with effect from January 2012. Interest accrued with effect from January 2012 and the installments would be serviced by the nigam every month.

The bank also agreed to retain the existing rate of interest without reset clause for 10 years after restructuring with the base rate plus 1 per cent (11.75 per cent per annum at present) with monthly rest.