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Mesco Steel plans to acquire some plants to tap into the growing opportunities in the domestic market and more than double its production capacity to 5.25 million tonnes, the company's CMD Rita Singh said. She however declined to comment on whether Mesco was eyeing a company facing insolvency proceedings. According to sources, Mesco is interested in Electrosteel which has a debt of Rs 10,000 crore and is also exploring a few options in three Indian states. These plants either have huge debts or are unable to face the tough competition in the market, they said. "We have a total production capacity of 2.25 MT from our 2 plants Mideast Integrated Steels and Maithan Ispat Limited at Jajpur, Odisha. We want to expand our capacity to 5.25 MT looking at the opportunities in the sector. "Mesco is always interested in acquiring such debt-laden assets," Singh told PTI in an interview. Automobile and infrastructure sectors are growing by leaps and bounds and both require lots of steel, she said. On the risks involved in turning around firms which are under-performing or debt-laden, she said: "We are an experienced player and we are a master in it. We made the Maithan Ispat functional within 10 days of acquisition." Odisha-based Maithan Ispat was acquired by acquired Mesco in a debt and equity deal in March, 2015. "On April 10, we made the plant functional.
Turning around an under performing or debt-laden plant is an art and we know it well," Singh said. She added that Mesco will acquire a debt-laden firm if it comes its way. Singh said that referring firms to NCLT for insolvency only delays the recovery process and likened the process to "out of court settlement". If some company is unable to perform, the creditors can suggest them some potential buyers to whom the debtors can go directly, she said, adding that it makes the entire recovery process much smoother. She said the same happened when the company took over Maithan Ispat. "If today Maithan Ispat was on the list of RBI list, do you think the creditors would have got their entire due amount so smoothly and quickly." Maithan had a debt of Rs 614 crore and now it has been regular in payment of interest and principal to the tune of Rs 188 crore, she said, adding that it has been successfully turnaround by Mesco within 2 years of acquisition. "We are likely to expand the existing facility of Maithan Ispat limited by adding TMT and Heavy Section Mill," she said. Singh further said that the company has already drawn a plan for raw material supply. "We have a 3 MTPA iron ore mine in Barbil, Odisha. We are looking to raise the capacity to 6 MTPA. We have already got the clearance for that but the catch is that the mine is with us only for next two years. The government will put it for auction in 2019," she said. She added however that the company will aggressively bid for it as also others mines that are put up for auction by the government.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)