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MUMBAI, Jan. 24

IN a bid to boost the waning capital of Tata Finance Ltd (TFL), the Tata group has infused Rs 100 crore as deposits towards Tier-I capital as on December 31, 2001. So far, from July, the group has advanced Rs 300 crore to Tata Finance.

At the annual general meeting of the company here, Mr Ishat Hussain, Chairman of TFL, said the group proposed to bring in an additional Rs 200 crore either on its own or through a strategic partner to achieve the requisite capital adequacy ratio (CAR) of 12 per cent. Currently, the CAR of TFL stands at around one per cent.

Mr Hussain said that though the company was scouting for strategic partners, it was "too early'' for anything to be settled. He added that the Rs 100 crore received as deposits in the first tranche had not yet been converted into an instrument and was likely to be treated as equity or quasi-equity.

With regard to issuing pink slips to its employees, Mr Hussain categorically stated that "we have not issued any pink slips, but have only spoken to the employees.''

Around 40 employees have been "briefed'' so far and of these, some of them have been retained, company officials said. Mr Hussain admitted that "it was a difficult task, but the company has no choice but to rightsize at this stage.''

Speaking to the shareholders, Mr Hussain said the company had decided to sell its 56 per cent share in Tata Finance Amex Ltd to American Express subject to statutory approvals.

"The company is also in touch with prospective buyers for its home finance subsidiary which itself requires substantial infusion of funds for it to grow to a meaningful size and compete with the giants already occupying the home finance market place,'' he said.

The company will also sell its credit card business, its windmills and its leased assets portfolio to reduce its high level of borrowings.

Mr Hussain said that TFL was aggressively targeting at reducing administrative and payroll costs. From a level of Rs 90 crore in 2000-01, the company is budgeting Rs 72 crore on an annualised basis for 2001-02.

"We are cutting down and consolidating offices, disposing of excess office and residential properties and rightsizing our manpower. We aim to reduce these costs further significantly in 2002-03, to a level below Rs 50 crore,'' he added.

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