New Delhi: The country’s largest stainless steel producer, JSL Ltd, plans to come out with a rights issue to raise Rs500 crore to part-fund its Orissa project.
“In all likelihood, the company will come out with a rights issue in (the) next 60 days aimed at raising Rs500 crore. Within 10 days, JSL will start the work on the same,” a person familiar with the development said.
The O.P. Jindal-group company is looking to issue around 70 million shares to its existing shareholders, which would strengthen the promoter’s stake by about 4% in the firm to 60%, a person in the know of the possible rights issue by the firm said.
“The company has already got approval of its board to raise Rs500 crore to partly fund the equity component of the second phase of our Orissa expansion project,” said Arvind Parakh, director (strategy and business development) at JSL. “We are mulling at different options to raise the amount, including rights issue.”
The stainless steel major is undertaking a Rs5,600 crore capacity augmentation programme in the second phase of the Orissa project to set up an 800,000 tonnes per annum mill to produce the alloy.
For funding the project, JSL has already raised about Rs4,400-4,500 crore in debt, and the rest is to be borne by the promoter and the company’s internal accruals.
The company has already installed a 250MW power plant, a 200,000 tonnes per annum ferro-alloy mill along with a 425,000 tonnes per annum coke oven unit in the first phase of the project. Along with its current 700,000 tonnes per annum stainless steel mill in Hissar, Haryana, JSL aims to reach an overall production capacity of 1.5 million tonnes per annum by March 2012.