Monday, November 29, 1999

Promoters to infuse Rs 230 cr into Ispat

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Kolkata, May 15 (PTI) The promoters of Ispat Industries would infuse Rs 230 crore into the company by subscribing 5 per cent of its equity capital to help it part-finance three upcoming projects in Maharashtra. The Pramod and Vinod Mittal-controlled Ispat Industries also got shareholders'' approval today to raise up to Rs 500 crore through qualified institutional placement and preferential allotment to promoters. The QIP proceeds would be used to retire debt. "The promoters will subscribe 5 per cent equity in Ispat Industries at a price not less than Rs 20.58 a share. This price translates into a total infusion of Rs 230 crore," Ispat executive director Anil Sureka said today. Total investment in these three projects -- all in Maharashtra-- is about Rs 1,700 crore, but Ispat would not raise any fresh debt to roll out them out, Sureka said, adding, "except mining, since power and coke oven plants are being executed through separate companies. So we will not add any fresh debt." Sureka also said Ispat would secure 100 per cent of coke, 40 per cent of power and 50 per cent of iron-ore needs at market linked prices. For the Rs 1,100-crore 1-mtpa coke oven plant at Dolvi in Maharashtra, Ispat would invest Rs 100 crore for a 26 per cent stake, while the remaining will be held by a foreign partner. It is expected to be operational by March 2012. Sureka, however refused to name the foreign partner. The second project is the 110-mw captive plant at Dolvi being in set up by subsidiary Ispat Power, which will be executed at a cost of Rs 490 crore. The third project is part financing a Rs 120-crore iron ore mine development project in Maharastra. Sureka said the company would repay debt between Rs 700 crore and Rs 750 crore per annum to reduce its existing overall debt of Rs 6,700. In 2009-10, it repayed Rs 1,000 crore in loans. Ispat hopes to up the EBITA margin to 30 per cent by 2012-13 from the current 20 per cent. "Once power, coke oven and iron-ore mining projects are complete the EBITA margin will increase to 30 per cent," he said.

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