Monday, February 21, 2011
India's SAIL to invest $12 bln in 4 overseas plants
Mon Feb 21, 2011 7:36am GMT
* Steelmaker plans to fund upto 80 percent through debt
* Plant start-up will take 3 years from initial agreement
* Overseas plants likely to produce 3 mln T of steel each (Adds quotes, background)
NEW DELHI, Feb 21 (Reuters) - Steel Authority of India (SAIL) (SAIL.BO: Quote) will build four overseas steel plants with a total $12 billion investment, which will be mostly funded through debt, its chairman said on Monday.
The state-run company is also looking for a strategic investor for its proposed plants in Indonesia, Oman, Mongolia and South Africa, which would produce three million tonnes (MT) of steel each, C.S. Verma told reporters.
"Funding of $12 billion will be met through 70-80 percent of debt and the rest 20-30 percent through equity," Verma said.
Last week, the Indian government put off a planned share sale in SAIL to the next fiscal year that begins in April, citing unfavourable market conditions. [ID:nSGE71H04V]
Verma said on Monday projects may take three years to start up once agreed.
"We are talking to the government of the countries where we plan to set up steel plants and it will take about three years to start the plants from the date of signing of (memorandum of understanding) with these governments," he added.
SAIL is part of the International Coal Ventures Ltd (ICVL) consortium which has bid for a Mongolian coal mine and is looking to buy overseas coal assets in countries such as Australia, Indonesia and the United States. [ID:nSGE712058]
Other companies in the group are utility NTPC (NTPC.BO: Quote), iron ore miner NMDC (NMDC.BO: Quote), Coal India (COAL.BO: Quote) and Rashtriya Ispat Nigam Ltd.
Last month, ICVL decided not to counter Rio Tinto's $3.9 billion bid for Australian coal miner Riversdale (RIV.AX: Quote).
Verma also said coal supplies from Australia should improve as the country recovers from recent floods.
"As floods recede in Australia, coking coal supplies have improved and it will have an impact on domestic steel prices." (Reporting by Mayank Bhardwaj; editing by Malini Menon,sourced:Thomson Reuters)
Tags: Indian steel industry news, investment, steel plant
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