Top banking sources confirmed to The Financial Express that the batteries to tea major was in talks with ICICI but said the loan structure has not been finalised.

The loan, to be disbursed in tranches, is expected to carry an interest rate of 17 per cent and be repayable over five to seven years. "This would be solely for replacing the company's high cost debt," said the official.

The battery-to-tea major had tied up loans worth Rs 100 crore from ICICI last fiscal.

In 1997-98, Eveready's loan component rose to Rs 366 crore from Rs 258 crore in the previous year. But it managed to reduce its interest burden by about Rs 2 crore to Rs 37 crore.

The company will not go in for external commercial borrowings this year as part of its corporatepolicy. The company lost almost Rs 6 crore on foreign loans following the depreciation of the Indian rupee.

It had raised Rs 39 crore as foreign currency loans including external commercial borrowings during 1997-98. The rupee's fall against the dollar has increased this burden to Rs 45 crore.

The net profit is expected to get a boost this year following the reduction in interest burden. During 1997-98, Eveready had reported a 227 per cent jump in net profit to Rs 45 crore.

The battery division reported a slower growth of 4.5 per cent during the year, against 10 per cent the previous year. The company had aimed for sales of 800 million batteries in 1997-98 against which it sold 771 million pieces.

A company official said that battery sales are expected to grow once the Noida factory becomes fully functional next month.

Tea prices, however, may not witness the same levels as last year.

Eveready gets around 25 per cent of its revenues from tea and around 61 per cent from batteries. The rest comesfrom other products like flashlight batteries, arc carbons, photo-engravers plates and strips for printing, electrolytic manganese dioxide and carbon electrodes.