To bail out Hindustan Copper Limited from its financial morass, the government plans to restructure the company's capital and waive interest on its loan, guarantee fee among others to adjust against HCL's accumulated loss of Rs 723 crore (Rs 7.23 billion).

"The government is considering to waive 7.5 per cent non-cumulative redeemable preference share amounting to Rs 180.73 crore (Rs 1.8 billion) and adjust it against accumulated losses," official sources told PTI.

In order to fund the company's expansion plans worth Rs 1,800 crores (Rs 18 billion), the mines ministry's restructuring plan for HCL envisaged only non-cash support of about Rs 637 crores, sources said and pointed out that the government was also considering to waive the PSUs outstanding dues against externally aided projects amounting to Rs 8.29 crores (Rs 82.9 million).

"Restructuring of capital through reduction of face value of equity share from Rs 10 to Rs 5 amounting to Rs 382.21 crore (Rs 3.82 billion) and its adjustment against the accumulated losses is another measure being considered," they said. The plan also envisaged waiving guarantee fees of Rs 15 crore or Rs 150 million (payable over a period of dive years) for government guarantee released during 2006-07 for raising bank loan worth Rs 150 crore (Rs 1.5 billion), they said.

"Besides, the government was also planning to convert non-plan loan amounting to Rs 50 crore (Rs 500 million) into equity and waiving its loan of Rs 1.03 crore (Rs 10.3 million) for 2005-06 and subsequent accrual in the future, sources pointed out.

"The above measures would give a healthy look to HCL's balance sheet and thereby increase its ability to raise funds and attract investments," they reasoned.