Mesco to invest Rs 1,000 cr on Maithan Ispat expansion

Expansion in two phases; SBI-led consortium to finance Rs 170 cr in first phase

Odisha based steel maker Mesco Steel has decided to pump in Rs 1,000 crore for revamp and expansion of Maithan Ispat, a company that it acquired in March this year in a debt equity deal of Rs 1,160 crore.

The expansion to be taken up in two phases, is expected to be completed in two years.

“In the first phase, we will invest Rs 300 crore. A consortium of nine banks led by State Bank of India (SBI) has approved a loan of Rs 170 crore while Mesco will invest Rs 130 crore as equity. In the first phase, we will put up an electric arc furnace of 50 tonne, a billet castor of the same capacity and a rolling mill. The second phase expansion would cost Rs 700 crore that would be raised from internal accruals and credit from equipment suppliers,” said J K Singh, chairman emeritus of Mesco Steel.

In the second phase, capacity of the existing power plant would be raised from 30 Mw to 90 Mw to meet the additional power requirement. Two DRI kilns of 500 tonne per day capacity each will also be added.

It may be noted that Maithan Ispat Ltd has a heavy section mill, with existing capacity of 0.80 million tonne per annum (mtpa), which is expandable to one mtpa.