KARACHI, July 1: Pakistan Steel on Monday made a payment of Rs2.28 billion to banks as second instalment due for fiscal 2001-02 against restructured loans.

The amount includes Rs945.8 million as an instalment and Rs122.5 million as mark-up.

A ceremony was held at the city office of Pakistan Steel at FTC, where Pakistan Steel chairman Lt-Col Mohammad Afzal Khan presented a cheque for Rs2.28 billion to Habib Bank SEVP Sohail Malik, the leading bank of the consortium comprising of five national banks.

The chairman said that Pakistan Steel had paid Rs2.16 billion during 2001-02 against the loans, which stood at Rs11.35 billion at that time.

Mr Afzal said the present management, which took over in 1999, had inherited an amount of Rs19.117 billion as loans. The actual amount of loan was 11.35 billion with an accumulated mark-up of Rs7.767 billion during last two decades.

The present government, he pointed out, had agreed to the proposal of restructuring the loan, according to which the payment of principal amount of Rs11.35 billion was to be made in 12 equal instalments along with mark-up. After that the amount of secondary loan of Rs7.767 billion was to be paid in seven equal instalments.

He said the financial restructuring was, however, co-related to the manpower restructuring, which had also been carried out successfully and the manpower had been brought down to 13,620 as compared to 20,533 by May 2000. Pakistan Steel has paid Rs4.24 billion in this regard.

Pakistan Steel chief said that restructuring had resulted in bringing down the personal related cost from 25 to 18 per cent. The restructuring included spinning off non-core activities, which had been carried out achieving 73 per cent of the target.

Mr Afzal told the gathering that fiscal 2001-02 was not encouraging for the corporation as it was neither for the economy of the country because of September 11 incident, Afghanistan situation, and the tension at borders with India, apart from recession in the steel market at international level.

He said the sales which had been down, picked up in the last quarter of financial year 2000-01, when record sales of Rs4.8 billion were achieved because of improved situation of steel in the international market.—APP