Rashtriya Ispat to raise Rs 22,500-cr debt

Rashtriya Ispat Nigam (RINL) today said it will raise Rs 22,500 crore long-term debt in tranches to increase its steel making capacity to 11.3 million tonne per annum by 2015-16.

"Our existing steel making capacity is 3.6 million tonne. This is going to go up to 6.3 million tonne by this fiscal. We don't need any fund here. We will raise Rs 22,500 crore debt in the next 3-4 years to fund capacity expansion from 6.3 million tonne to 11.3 million tonne by 2015-16," RINL's Director Finance P Madhusudan told PTI.

The state-run firm has invited around 45 lenders, both domestic and international, to present its future vision in Mumbai on the first week of the next month.

"It will be an initial meeting with prospective lenders. We have invited both domestic and international banks. We will present our vision and request the lenders to submit their expression of interests (EoI) for our debt-raising programme," Madhusudan said.

The RINL Director, Finance, however, said that the company would borrow the fund from lenders which would give the best competitive rates and lay down softer terms and conditions, be they domestic or international.

The instruments to be used for raising debt would be decided on the basis of lenders' response to EoI, he said.

RINL has spent around Rs 12,000 crore -- mostly from internal accruals -- to expand its steel making capacity to 6.3 million tonne per annum, which will be commissioned in the current fiscal.

The company requires to invest over Rs 22,000 crore for further enhancing its capacity by around 5 million tonne to 11.3 million tonne by 2015-16.

RINL intends to increase one mtpa capacity through modernisation and the remaining 4 million tonne by way of setting up of a new plant adjoining to its existing facility at Vizag, where it has around 20,000 acres of vacant land.

Madhusudan said post-debt raising, RINL's debt-equity ratio would be 1.5:1. RINL is debt-free now.