Jindal Stainless to raise $100 million through ECB

Our Corporate Bureau
23 March 2004

Mumbai: The board of Jindal Stainless Limited has approved a proposal for external commercial borrowings (ECB) funding of up to $100 million.

The board also approved a plan to set up a greenfield project in Orissa involving capital expenditure of Rs 950 crore to produce ferro chrome, ferro manganese, silico manganese and set up a coke oven battery.

In a statement to the Bombay Stock Exchange, the company said it has already received proposals to syndicate the ECB facility, which besides reducing financial costs would extend the maturity profile of the existing debt. The loans will be for a period of five years. Interest rate is likely to be 150-175 basis points over the Libor.

The green field project at Duburi, Orissa, involves production of 1,50,000 tonnes per annum (TPA) of ferro chrome, 30,000 TPA of ferro manganese and 60,000 TPA of silico manganese. Also present is a 3,00,000 TPA coke oven battery.

The setting up of the project will give Jindal Stainless easy access to raw materials and enhance its ability as a cost competitive producer of stainless steel. "Today the Chinese requirement has created shortages with all-round price increase of raw materials for the manufacture of stainless steel, which we perceive may increase the company's risks both in terms of availability and pricing.

"By setting up this project the company will secure availability and ensure that it has control over raw material cost," the statement said.