JSW Steel plans to raise $600 mn from overseas markets
Private steelmaker JSW Steel plans to raise USD 600 million through overseas borrowings by March next year to prepay part of its rupee loan.
"We are planning to prepay Rs 3,500 crore rupee loans by raising USD 600 million subject to the approval of the RBI. Hopefully by the end of the fiscal, we will be going for raising funds," JSW Steel's Joint Managing Director and CFO Seshagiri Rao said.
Stating that the Reserve Bank of India (RBI) had recently allowed raising dollar loans for prepaying rupee loans, he said that in October, JSW sought RBI approval for availing the facility.
"The approval will be valid only for three months. So if approval comes in January, we have to finish it within three months," he added.
In June, the Reserve Bank of India had permitted Indian companies to prepay rupee loans by raising foreign currency loans based on weighted average of exports in the last three years. Accordingly, domestic manufacturing and infrastructure firm can go for external commercial borrowings upto USD 10 billion after meeting certain conditions.
"Our entire sales revenue is dollar-linked. Whether we sell in the domestic market or export, it is based on landed cost of imports. Therefore it (prepaying rupee loans by
raising dollar loans) is an opportunity for us to reduce our cost of funding by accessing international markets," Rao said. As on September 30, 2012, JSW's total long term borrowings stood at about Rs 15,149 crore as on September 30, 2012.
Besides, its associate firm JSW Ispat Steel, which is under
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