JSW Steel takes debt-equity route to raise Rs6600 crore

JSW Steel Ltd, part of Sajjan Jindal's JSW Group, aims to raise Rs6,600 crore through debt and equity for financing its Rs11,000-crore steel project in West Bengal's Salboni, joint group chief financial officer Krishna Deshika said in Kolkata on Thursday.

Deshika told newspersons that 60-65 per cent of the total project cost would be funded through debt. ''The rest will be taken care of through equity,'' he said.

JSW Steel entered into a development agreement in 2007 with the state government, West Bengal Minerals Development and Trading Co and West Bengal Industrial Development Corp for setting up the 10-million-tonne per annum steel and power plant. The project will be executed by JSW Bengal Steel Ltd, a subsidiary of JSW Steel.

JSW Bengal Steel and JSW Energy would form a special purpose vehicle for setting up the 1,600 MW power plant with a shareholding of 26 per cent and 74 per cent respectively, said Biswadip Gupta, chief executive of JSW Bengal Steel.

The estimated project cost for the power plant is Rs.7,680 crore, which would be funded by a combination of debt and equity in a ratio of 3:1. The project is expected to be operational commercially by February 2015.

JSW Energy is proposing to enter the capital market with an initial public offering (IPO). It plans to raise Rs3,000 billion crore, Gupta said, adding that the Salboni steel project would benefit from it.