Hindustan Copper Ltd?the country?s sole vertically integrated copper company combining mining, beneficiation, smelting, refining and casting of refined metal?has advanced its external commercial borrowing programme to the next fiscal, though the original plan was to raise the funds a year later, in 2013-14.
The company expects a shortfall of R200 crore-plus in FY2014 in funding its R3,500-crore expansion programme, slated to complete 2017. In all, the project will need R700 crore from external sources.
The company wanted to issue fresh shares in a follow-on public issue (FPO) planned as part of the government’s disinvestment programme. But with the fresh share issue plan not finding favour and the FPO delayed over poor market conditions, the company has advanced its external commercial borrowing (ECB) plan. The company would raise R250-crore from overseas markets next fiscal, its chairman and managing director Shakeel Ahmed told FE.
?Even though, the requirement for these funds would be in 2013-14, we’ll go for an ECB in the next fiscal. We have an expansion plan of R3,484 crore starting from 2011-12 for the next five years. While, most of it would be met through internal generation, there would be a gap of around R700 crore. The R250 crore through ECB would be a part of it,? Ahmed said.
Hindustan Copper has four operating units?Khetri Copper Complex in Rajasthan, Indian Copper Complex in Jharkhand, Malanjkhand Copper Project in Madhya Pradesh and Taloja Copper Project in Maharashtra.
In Rajasthan, the company has started the expansion of its Banwas, Khetri and Kolihan mines. This is expected to increase its ore production from 1 million tonne to 3.1 million tonne per annum, and cost around R538 crore.
The company had closed down its smelting plant at Khetri. Ahmed said there was no plan to reopen it as it makes no business sense for the company to have a smelting plant .
The PSE under the ministry of mines is likely to come out with its long-delayed FPO in the first quarter of next financial year, staring in April. Unlike the original plan which included issuance of 10% fresh equity, the current plan comprises only 10% government stake sale through the FPO route. The disinvestment will bring down promoters? holdings in the listed company to 89.59% from 99.59%.
The company reported a net profit of R79.1 crore during the third quarter ended December 2011 as against R80.72 crore in the same period last year, registering a marginal decline of 1.96%.
Apart from copper, the company also produces gold, silver, nickel sulphate, selenium, telurium and fertiliser as
by products.
