Ispat Ind Ties Up Rs 1198cr Forex Loan For Dolvi

Ispat Industries, flagship of the M L Mittal-controlled Ispat group, has entered into an agreement with KFW (Kreditanstalt fur Wiederaufbau), Germany, and International Finance Corporation (IFC), Washington, for Rs 1,198 crore fund infusion as part of the foreign currency requirement for its Rs 4,792-crore integrated steel project at Dolvi, Maharashtra.

Of this, Rs 743 crore has been sanctioned by KFW while the remaining Rs 455 crore is being extended by International Finance Corporation.

While the KFW loan has been sanctioned in installments of DM 180.885 million and $25.154 million the IFC loan is being extended in four installments of $30 million, $60 million, $15 million and $25 million. All loans will be repayable in 20 equal half-yearly installments.

 

The integrated hot rolled (HR) steel coil project has a debt equity mix of 2.53:1.

The equity portion consists of Rs 1,450 crore of which Rs 800 crore is expected to be raised through a debenture issue slated to hit the market on May 8. The debenture will be fully convertible within 18 months from the date of allotment.

The Mittals, who are promoters of the project, will pump in another Rs 100 crore.

In March 1994, the company also made an issue of three per cent Euro Convertible Bonds 2001 aggregating Rs 392.13 crore. Of this Rs 215 crore will be deployed for the project. The debt portion of the total project cost amounts to Rs 3,342 crore.

The company has secured Rs 962 crore as rupee term loan/ non-convertible debentures (NCD) from Indian financial institutions (IFI) and banks. An additional Rs 177 crore has been sanctioned by IFIs and banks as lease assistance.

The foreign currency requirement for the project has been estimated at Rs 2,203 crore of which Rs 1,198 crore has been sanctioned by Kreditanstalt fur Wiederaufbau and IFC.

Of the remaining Rs 1,005 crore, IFIs and banks will pump in Rs 719 crore while Rs 286 crore has been sanctioned as suppliers credit/foreign currency loan with DPG (deferred payment guarantee) by IFIs and banks.

The three million-tonne per annum capacity HR steel coil project includes a 350mw captive power plant for which Swedish multinational ABB has been commissioned.

The company has already spent Rs 1811.71 crore on plant installation and other project-related civil construction work.

The major production units for the project include a steel melting shop, ladle refining unit and a continuous casting and rolling mill.

The company has entered into comprehensive equipment supply agreement with suppliers like SMS Scloemann Siemag, Germany, Mannesman Demag and Siemens.