Ispat lines up Rs 890 crore investment

By siliconindia   |   Monday, 06 October 2003, 19:30 IST
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KOKATA: Fresh from getting huge reprieve following approval of their corporate debt restructuring (CDR) proposal nine months back, Pramod Mittal-promoted Ispat Industries Limited (IIL) has drawn up an ambitious Rs 890 crore investment plan to augment production facility and bring down cost to improve its bottomline. "We will be investing about Rs 890 crore during the next 15-18 months on setting up our own captive iron ore mines, increasing hot metal production capacity, expansion of jetty capacity to handle 10 million tonne of cargo, develop production facility for replacement of iron ore and pellets and set up a 110 MW captive power plant to reduce cost of production of steel," IIL chairman and managing director Pramod Mittal said. He said the entire amount would be arranged from internal accruals and they would not approach institutions for extension of debt facilities, except for power plant for which equity arrangement has already been made. "Completion of all these projects during next 15-18 months will result in an annual saving of Rs 1135 crore to the company," Mittal said. To a question, he said the equity portion for power plant had already been arranged and negotiations were on with institutions for financial closure. ICICI Bank has already committed to extend a credit line of Rs 50 crore for the project. Mittal said they were expecting three per cent increase in their domestic steel market share to 14 per cent this fiscal from 11 per cent last fiscal and exports was also expected to increase from 4.80 lakh tonne last year to 7.00 lakh tonne. "Debt settlement with foreign lenders will bring in a one time saving of Rs 547 crore and recurring annual saving of Rs 50 crore," he said. About setting up captive mines, the CMD said, "We are going to buy mines and negotiations are going on for this." "Hopefully, we will be in mining in next two years. We are doing due diligence and feasibility study is going on," he said, but refused to hazard any guess on the volume that they would derive from the mines. "It is difficult to look at volumes right now, because a lot of studies needed to be carried," he said. He also indicated that they would possibly acquire mines in Goa and Karnataka as these were the most suitable locations to them.

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