New Delhi: Indian Telephone Industries (ITI) is in talks with banks including State Bank of India (SBI), Corporation Bank, HSBC, Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI) for restructuring its debt and availing cheaper loans, including foreign debt, of about Rs 400 crore by March end.

"The company is holding negotiations with banks and FIs for reduction of interest costs. It is also exploring options of Foreign Currency Non Resident (FCNR) loans, derivative products and other innovative debt instruments," ITI Director (Finance) C S Verma said over phone from Bangalore.

ITI is planning to tie up for a total foreign debt including derivatives, amounting to Rs 400 crore.

Industry sources said ITI was in negotiations with SBI, Corporation Bank, Deutsche Bank, HSBC and Barclays, apart from term lending institutions like ICICI, IDBI and IFCI.

"The total offer is expected to be as much as Rs 400 crore and likely to be through by March 2002," sources said, adding, "it is dependent on offers made by participating parties and market conditions".

This public sector unit has also asked banks and FIs to restructure its debt to bring down the total interest cost per annum by Rs 30-40 crore from the present level of Rs 120 crore.

ITI, which turned around recently, had an interest outgo of Rs 40 crore in the third quarter ended December 31, 2001.

It increased to Rs 74.76 crore in first-half of this fiscal.

PTI