Bhushan Steel Ltd (BSL) plans to raise about Rs 2,000 crore to part-fund the expansion of its steel plant in Orissa from 0.5 MT to 2.2 MT over the next one year besides achieving a combined steel making capacity of 1 MT at its Sahibabad (Delhi) and Khopoli (Pune) plants.
The company, which has already spent about Rs 4,000 crore on its plant in Dhenkanal (Orissa), intends to maintain the debt equity ratio of 70:30.
The capacity of the Orissa plant, would be expanded to 6 million tonne later. ?We already have land available with us and the plant is operational. The expansion process (of 2.2 MT capacity) should be over within next one year,? director finance Bhushan Steel Ltd Nitin Johri told FE.
The company aims to spend over Rs 1,500 crore for the upgrade of the Orissa plant, while it would invest another Rs 400 crore to augment capacity of its two steel plants at Sahibabad and Khopoli.
To ensure uninterrupted supply of raw material, BSL has also applied for iron ore mine in Orissa to meet it requirement. The company has access to over 320 MT iron ore reserves in a unit jointly mined by seven companies. The mine in Talcher (Orissa) has estimated reserves of about 650 MT.
For coking coal, BSL recently bought a 15% stake in Australia’s Bowen Energy for A$3.2 million (approx Rs 11 crore). Industry sources said that BSL was planning to increase its stake further in Bowen Energy. But BSL did not offer any comments on the issue.
BSL has a 110 MW power plant functional in Orissa and plans to set up another plant of 300 MW capacity in the sate to meet its future power requirements. The investment in power plants is aimed at future steel capacities including the 2 MT unit planned in West Bengal, said an industry analyst.