MUMBAI The RBI on Thursday extended the scheme for corporates to get rid of their overseas loans by pre-paying them as weak rupee increases their debt obligation. The prepayment of foreign currency convertible bonds, or FCCBs, "shall come into force with immediate effect and the entire process of buyback shall be completed before March 31, 2013, after which the scheme lapses", an RBI circular said. With rupee losing about 25% in the past year, the redemption costs of overseas loans availed of by Indian corporates have increased significantly. Under these circumstances, several companies with FCCBs on their balance sheets are keen to retire these loans.
"On a review, it has been decided to continue the scheme of buyback of FCCBs subject to certain modifications," the RBI said. Indian firms can now buyback the FCCBs at a minimum discount of 5% on the book value utilising their foreign currency funds under the automatic route, as against 8% earlier, it said.FCCBs witnessed a huge surge during 2006-07. However, the global economic meltdown on 2008-09 impacted most of the companies. —PTI
0 comments:
Post a Comment