Monday, November 29, 1999

Ispat promoters to infuse Rs 230 cr to fund 3 projects

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Pramod and Vinod Mittal controlled Ispat Industries Ltd has decided to infuse Rs 230 crore to subscribe 5% of equity capital in order to part-finance three projects, which would help in reducing operational cost.Anil Sureka, executive director, on the sidelines of Ispat's general meeting on Saturday said the promoters will subscribe at a price "not less than Rs 20.58 a share", which would aggregate to a total infusion of Rs 230 crore.The company took its shareholders' approval on Saturday to place up to Rs 500 crore through QIP (qualified institutional placement) along with preferential allotment to promoters. Sureka said the company has planned three projects; a 1 million tonne per annum coke oven plant, 110-mw power plant and an iron ore mining project in Maharashtra; which together would entail an investment of Rs 1,710 crore. But Ispat will not raise any fresh debts to fund the coke oven and power projects, although the mining project would need some debt funding, Sureka said."Since the power and coke oven plant were being executed through separate companies, we will not add any fresh debt except for executing our mining project," Sureka said. He said the company as of now has debt burden of Rs 6,700 crore after repaying Rs 1,000 crore in 2009-2010. Ispat aims at repaying Rs 700-750 crore per annum to reduce its overall debt burden.He said for the 1 mtpa coke over plant, which would require an investment of Rs 1100 crore, Ispat, would invest only Rs 100 crore to take up 26% in the project, while the balance stake would be held by a foreign partner. Sureka expected the coke oven plant to be operational by March 2012.Ispat Industries' subsidiary, Ispat power will execute the 110mw power project at an estimated cost of Rs 490 crore and Ispat Industries will spend Rs 120 crore for developing the mining project in Maharashtra.Sureka said with all the three projects commissioned, Ispat would secure cent percent captive coke, 40% of its total power requirement and 50% of its iron ore requirement, which it currently sources from the market at market determined prices.

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