Tisco To Raise Rs 1400 Cr This Year Flotations

Tata Iron and Steel Company (Tisco), the giant private sector steel-maker, plans to raise Rs 1,400 crore in 1997-98 to meet immediate working capital and capital expenditure requirements.

The funds will be raised through term loans, public debt flotations, foreign offerings or domestic private placements.

The company is seeking shareholder approval at its annual meet on July 31 to approve the creation of mortgages on the companys assets to raise funds.

Last year, Tisco had sought shareholders approval to raise Rs 1,700 crore during 1996-97. During the year, the company had created charges on assets to secure financial assistance aggregating Rs 810 crore. This leaves a residual amount of Rs 890 crore.

Tisco is also seeking shareholders approval to raise its borrowing limits by Rs 500 crore to Rs 5,500 crore. Last year, the company had taken shareholders approval for a borrowing limit of Rs 5,000 crore. The move to raise the borrowing limit is designed to meet the additional working capital requirements of the company.

Tisco, it may be mentioned, had raised Rs 750 crore by way of secured redeemable non-convertible debentures to fund a part of its capital expenditure and working capital requirements in 1996-97. The company has also arranged foreign currency loans of $ 68 million to meet the foreign currency requirements of its modernisation programme.

Tisco will also be seeking the shareholders approval for the sale of its 67.5 mw Jojobera power plant to Tata Power Company and Andhra Valley Power Company for Rs 300 crore. Tisco was paid a sum of Rs 200 crore in cash and the rest in the form of an allotment of 56,81,818 shares of Tata Power Company.

Tisco, which reported a profit after tax of Rs 469.21 crore during the year, is currently implementing the fourth phase of its modernisation programme.

Various facilities of the modernisation are expected to be commissioned progressively beginning from the second half of the next fiscal year.

The company has already acquired 2,700 acres of land for its proposed cold rolling unit at Gopalpur.

The rehabilitation of the displaced villagers is currently in progress. The technology and process for the proposed plant has also been finalised and bids for equipment are being evaluated.