Jindal Steel raises $475m for Oman expansion plan

Jindal Steel raises $475m for Oman expansion plan

Dubai: Jindal Steel & Power Limited (JSPL), which owns the Jindal Shadeed Iron and Steel plant in Oman’s Sohar district, has raised $475 million in India through the takeout financing route to fund its expansion programme in the Gulf country, a news report has said.

JSPL, one of India’s largest steel-makers, said the company raised the loan at 225 basis points over the London inter-bank offered rate (Libor) for tenure of five years, with ten banks participating in the transaction.

According to a Muscat Daily report, JSPL’s takeout loan transaction is one of the largest such transactions by a company in India.

D. K. Saraogi, the executive president of Jindal Shadeed and the head of JSPL’s Oman operations, said a major part of this loan will be used to finance the expansion programme in Oman, though some money is likely to go for technology and technical purchases outside Oman. Saraogi, however, did not divulge details of the investment plan in Oman for the next phase of expansion.

“We are trying to take the capacity up to 5 million tonnes (MT) by 2015-2016. Until the expansion programme is initiated, we cannot divulge details of investments," he told the newspaper. Saraogi said that in due course, JSPL will get pellets from JSPL’s plant in Bolivia.

“The Bolivia plant will take almost two years to start operations and after that, we can get pellets from there. So far, we got only one ship from India and the rest have come from other sources," Saraogi said.

JSPL acquired Shadeed Iron and Steel Company, situated in Sohar district of Oman, in May, 2010, from Abu-Dhabi’s Al Ghaith Holdings for $464 million. The $500 million integrated steel complex of Jindal Shadeed was dedicated to the nation at the Port of Sohar in May this year. The current capacity of the plant is 1.5 MT per annum of hot briquetted iron (HBI) and hot directed reduced iron (HDRI).