Sail To Raise Borrowing Limit To Rs 15,000 Crore

Steel Authority of India has also decided against making a fresh equity issue in 1996-97.

However, fresh issue in the domestic or international market may be considered in the subsequent years, director (finance) VS Jain told shareholders at the company's 24th annual general meeting.

While launching its maiden global depository receipts (GDRs) issue, Steel Authority of India had committed that there will be no fresh issue till September 1996 and no government divestment till December 1996.

The government holds around 85.8 per cent of the equity in Steel Authority of India, while 3.5 per cent is held through global depository receipts and the rest is held by financial institutions and the public.

 

Steel Authority of India has undertaken a massive technology update,the company's chairman MRR Nair said.

He said the public sector steel major was spending about Rs 2500 crore on modernisation programmes a year.

He said during 1995-96 Rs 2747 crore was spent on modernisation schemes.

Steel Authority of India will spend about Rs 15,000 crore on modernisation during the ninth plan period of which 60 to 70 per cent of the funds will be generated from internal resources alone. The shortfall will be met by arranging funds from the market.

At present, modernisation schemes are being implemented in Durgapur, Rourkela and Bokaro steel plants.

The update at the Rourkela plant is likely to be completed by the end of the current financial year, whereas Bokaro's modernisation programmme is on schedule.

Steel Authority of India net profit after tax has increased from Rs 1108 crore in 1994-95 to Rs 1319 crore in 1995-96, while its sales turnover has reached Rs 14,710 crore.

The plant's capacity utilisation rose to 101 per cent taking the total steel capacity to 9.16 million tonnes last fiscal.

The company declared a 6.6 per cent dividend and the total dividend payout was Rs 260 crore or 20 per cent of the net profits.

During the current year the prices of inputs like coal power, freight, petroleum products had put an additional burden of about Rs 1100 crore on the company. The recent price hike effected by Steel Authority of India would yield an additional Rs 350 crore, Nair added.

Steel Authority of India has also entered into a joint venture with Larsen & Toubro and the CEA Inc of the US for setting up a 500 mw power plant at Bhillai. The same plant will also supply power to the Bhilai steel plant.

The company is also exploring the possibility of entering into joint ventures in other related areas like shipping, coal mining, port development and manufacture of slag cement, Nair said.