Ispat Industries to raise Rs1000 crore for expansion programme
31 Mar 2008
Kolkata: Integrated steel firm, Ispat Industries plans to raise Rs1,000 crore to part finance three new projects worth Rs2,300 within the next two years. The company will raise the amount through rights issues and foreign currency convertible bonds (FCCBs) to finance the projects.
The steel maker would utilise the funds to set-up a 1 million tonne per annum (mtpa) coke oven plant and a 4.5 mtpa pellet plant and also raise its existing hot-rolled coil capacity from 3 million tonnes from three million tonne to 3.6 million tonnes, as part of its expansion plans.
Ispat Industries has entered into a joint venture with Stemcor, a UK-based steel trading major for setting up the coke oven plant at Dolvi, at an investment of Rs925 crore. Ispat would contribute Rs100 crore towards equity of the joint venture, said a top official of the company.
During the EGM held on 29 March 2008, the company's shareholders approved a Rs 509-crore preferential issue of convertible warrants to the promoters to raise their stake to 47.43 per cent from the pre-issue shareholding of 42.44 per cent. Each equity warrant has been priced at Rs43.89 for equity shares of face value of Rs 10 each.
The promoters are planning to increase their stake to 51 per cent by next year. Post-issue, the promoters' stake in the company would stand at 47.43 per cent from the pre-issue shareholding of 42.44 per cent.
The lock-in period for the warrants would be 3 years, and post-issue the paid-up capital of the company will increase from Rs1,222.44 crore to Rs 1338.53 crore, the company official added.
