Bangalore, Nov 22: NGEF Ltd plans to raise Rs 50 crore through a bond issue to meet its working capital requirements and liabilities.

NGEF chairman and managing director Vijay Gore, said the five-year bond will hit the market next month. It has already initiated talks with fund managers for the purpose.

Earlier, the state government had approved the company's intention to mop up funds to exit the Board for Industrial and Financial Reconstruction (BIFR) net. The proposed bond issue is likely to carry a state government guarantee and will help the company in an early discharge of its liabilities.

Contrary to the prevailing interest rates, the company still pays 17 per cent interest on the principal amount to financial institutions. NGEF has approached the Industrial Development Bank of India (IDBI) for curtailing the interest rate from the present 17 per cent to the prevailing 12.5 per cent and is awaiting a favourable reply, Gore said.

A part of the amount thus raised would be utilised to pay back the secured loan from various financial institutions and to fund the ongoing voluntary retirement scheme (VRS) as per the BIFR approved package,according to Gore. The remaining amount would be earmarked for the company's working capital requirements.

NGEF will soon announce yet another voluntary retirement scheme (VRS) targeting 425 employees. NGEF, according to Gore, is also planning to close down its non-viable units and product lines.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.