Posco to raise funds from India

South Korean steelmaker Posco plans to fund its proposed 12 million tonne greenfield steel plant in Orissa by a mixture of equity and debt including borrowings from financial institutions in India.

The first phase of Posco India 4 MT steel plant is expected to be completed by 2010. It will see an outlay of $3.7 billion.

"About 35-40 per cent would be funded through equity and the rest will comprise of borrowings including syndicated loans, bank loans and corporate loans from across the world including India," said Cho Soung-Sik, chairman and managing director, Posco India .

The South Korean company had signed a Memorandum of Understanding with the Orissa government on June 22, 2005 for establishment of the plant.

The company expects to begin the first phase work by 2007 despite delays associated with land acquisition.

Out of the first phase production, the company plans to export about half while the rest will service the domestic market. Of this, 2.5 MT would be hot-rolled coils while 1.5 MT would be steel slabs.