Ispat India plans to raise $500Mn for project funding

By SiliconIndia   |   Thursday, 26 July 2007, 07:00 Hrs
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Kolkota: Ispat Industries expects to raise $500 million through Foreign Currency Convertible Bonds (FCCB) or external commercial borrowings (ECB) to fund new projects that are part of the company's 'vertical integration strategy', according to Pramod Mittal, Chairman of the company.

Mittal said that the company was focused on reducing its dependence on third-party raw material suppliers, as also its exposure to price volatility of basic inputs. As a part of cost saving and capacity enhancing capital projects a one million ton per annum capacity coke oven plant would be operational by mid-2009 and a 4.5-mpt-pellet plant would be st up at Vishakapatnam by the third quarter of 2009.

According to Mittal, presently the major weakness of the company is high-debt burden, high energy and raw material prices and also lack of access to captive source of crucial raw materials such as coke and iron ore. To overcome this, the company was trying to retire part of the debt and also reduce the interest burden on existing burden by swapping of currency.

In the current fiscal the company expects to reach its savings by 150 crore. During the year ended, March 31, 2007, ispat Industries earned a total income of 7,595.49 crore against 5,010.73 crore in 2005-06. The company recorded a net loss of 9.53 crore in 2006-07 compared with a net loss of 812.67 core in 2006-07.

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