RINL to raise Rs 22,500-cr debt to fund expansion

Rashtriya Ispat Nigam Limited on Tuesday said it would raise Rs 22,500-crore (Rs 225-billion) long-term debt in tranches to increase its steel making capacity to 11.3 million tonnes per annum by 2015-16.

"Our existing steel making capacity is 3.6 mtpa. This is going to go up to 6.3 mtpa by this fiscal. We don't need any fund here. We will raise Rs 22,500 crore debt in the next 3-4 years to fund capacity expansion from 6.3 mtpa to 11.3 mtpa by 2015-16," RINL's director finance P Madhusudan told PTI.

The state-run firm has invited about 45 lenders -- both domestic and international -- to present its future vision in Mumbai on the first week of the next month.

"It will be an initial meeting with prospective lenders. We have invited both domestic and international banks. We will present our vision and request the lenders to submit their expression of interests for our debt-raising programme," Madhusudan said.

The RINL director, finance, however, said that the company would borrow the fund from lenders which would give the best competitive rates and lay down softer terms

and conditions, be they domestic or international.

The intsruments to be used for raising debt would be decided on the basis of lenders' response to EoI, he said.

RINL has spent about Rs 12,000 crore (Rs 120 billion) -- mostly from internal accruals -- to expand its steel making capacity to 6.3 mtpa, which will be commissioned in the current fiscal.

The company requires to invest over Rs 22,000 crore (Rs 220 billion) for further enhancing its capacity by around 5 mtpa to 11.3 mtpa by 2015-16.

RINL intends to increase one mtpa capacity through modernisation and the remaining 4 mtpa by way of setting up of a new plant adjoining to its existing facility at Vizag, where it has about 20,000 acres of vacant land.

Madhusudan said post-debt raising, RINL's debt-equity ratio would be 1.5:1.

RINL is debt-free now.