Surana Industries raising $25 mn via FCCB

Steel-maker Surana Industries Ltd (SIL) has so far raised $14 million via the issue of foreign currency convertible bonds (FCCBs) totalling $25 million.

The company expects to raise subscriptions worth $11 million more in another ten days through the issue, which has been listed on the Luxembourg Stock Exchange, SIL managing director Dinesh Surana said.

The bonds will be converted into equity shares at a price of Rs 140 per share, the company said. The company is also on course to raise a further $25 million through qualified institutional placements (QIBs) to finance its future expansion plans.

The funds raised through the FCCB issue will be utilised for the integrated steel plant, which SIL is setting up at Raichur in Karnataka at an investment of Rs 473 crore. Besides raising debt to the tune of Rs 331 crore, another Rs 142 crore is being roped in via equity sources, the company said.

Surana said the FCCB issue would enable the company to speed up the processing work on its Raichur project. The plant is expected to be operational in March next year, with full commercial production of alloy steel starting in June 2008.

SIL, a division of the Rs 2,500-crore Surana Group, clocked revenues of Rs 778 crore in 2006-07, and a net profit of Rs 30 crore. Post the commissioning of the Raichur plant, SIL's annual revenues are expected to exceed Rs 1,200 crore, with the net profit touching Rs 100 crore.