KARACHI (January 09 2003) : National Bank of Pakistan on Wednesday restructured the interest rate on the syndicated loan of Rs 2 billion to Hubco which would result in saving of over Rs 200 million for Hubco.
This nine-bank 'Syndicated Senior Rupee Facility' of Rs 2 billion was extended to Hub Power Company in 1994 for 11 years' period at an interest rate of 24 percent.
The singing ceremony on Wednesday was held at the National Bank Head Office, Karachi, and was attended by CEO of Hubco, President of NBP and Wapda representatives.
In the wake of current fall in interest rates, the interest rate on the same amount of Rs 2 billion has been restructured till the maturity of the loan in 2005.
The new rate will be 15 percent, while the major part of the principal amount has already been paid.
“This restructuring of interest rate will save Rs 220 million for Hubco and that will be passed on to Wapda which could give some relaxation to the consumers,” said Ali Raza, President of National Bank of Pakistan.
The new restructured interest rate of 15 percent will have retrospective effect from January 2002.
He said it would be beneficial if all the dollar lending in IPPs, cement, and textile industries is converted into rupee.
The lending to IPPs is around 1.7 billion dollars, he added.
However, General Manager, Wapda, Engr Muhammad Akbar, found it difficult to pass on relaxation with the saving of Rs 220 million.
The amount of Rs 220 million is collective figure and would be saved in four years till 2005.
“It's good that we would get Rs 220 million but, you know, Wapda would have to pay Rs 115 billion as cost of energy to the independent power producers (IPPs) till the end of this fiscal year by June 2003,” he said.
IPPs are providing one-third of Wapda's energy requirements.
Earlier, the Chief Executive of Hubco, Vince Harris, said that Pakistan has exciting future for foreign direct investment.
He said Hubco was enjoying excellent relations with Wapda.
“I must appreciate Wapda the way they handled the situation and resolved the problem between the two,” said Harris referring the long tussle over tariff between the two organisations.
The consortium banks for the above loan are HBL, UBL, MCB, ABL, Picic and IDBP.