Essar Steel to raise R3,000-cr convertible debt

The decision to this effect was taken at the company's annual general meeting on October 20, according to the filing with the registrar of companies.

“The company is looking at various alternatives in India and in international markets for long-term fund raising through equity, bond or any other form of hybrid securities to replace its high cost debts,” Essar Steel said in the filing.

“The modalities of such issues are under consideration of the management,” the filing added. “The company is approaching various agencies, investors and financial institutions for the purpose".

In 2011-12, the company completed its expansion of the Hazira steel plant to 10 million tonne per annum. However, the expansion has taken its toll on the company. The company’s interest costs rose 68% to R2,235 crore as the company made a loss of R1,251 crore.

Net sales for the company during the fiscal stood at R16,056 crore.

In total, Essar Steel has invested R37,500 crore at its Hazira plant since 1989. The plant that produced 7 million tonne of flat steel in 2011-12 is expected to reach its full capacity by 2013-14.

“At 10 million tonne capacity, this facility will generate R40,000 crore as revenues,” said Prashant Ruia, group chief executive, Essar Group in January, when

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