Shyam to build steel, power units

Shyam Sel Limited today signed a memorandum of agreement (MoA) with West Bengal Industrial Development Corporation (WBIDC) to implement a Rs 9,900 crore steel and power project.

The project comprises a 1.1 million tonne finished steel plant and a 1,000MW captive power plant.

B Bhushan Agarwal, vice chairman and managing director, Shyam group said, the project would come up at Jamuria near Asansol in the Burdwan district of West Bengal. The project would be completed in phases and required 1,500 acres.

The company was hoping that the government land, 35-40 per cent of the total, would be handed over in 3-4 months' time.

The first phase of 0.2 million tonne of stainless steel and 250MW of power would be commissioned by mid-2009. The total of 1.1 million tonnes of steel and 1,000MW of power would be completed within 42 months from date of handover of land.

The project would be funded through a mix of debt and equity. An initial public offering (IPO) and private placement would be part of the equity funding.

At present, promoters hold around 95 per cent in Shyam Sel and is looking to dilute 25-30 per cent. Agarwal said, the order for the sinter plant had already been finalized with a Chinese company while the blast furnace would be supplied by TRF.

"We have also finalized long-term procurement contracts for the fines with the mine owners," said Bhushan.

The coal for production of steel and power in the integrated plant would be sourced from captive blocks once allotted through West Bengal Mineral Development and Trading Corporation (WBMTDC).

"Once the plant becomes operational, it shall generate employment opportunities for more than 4,000 families," said Agarwal.