RINL to pick up 15% stake in SPV

PSUs' move to acquire coal mines abroad.

The board of Rashtriya Ispat Nigam Limited (RINL), the flagship company of Visakhapatnam Steel Plant (VSP), has approved the proposal to pick up 15 per cent stake in the special purpose vehicle (SPV) set up for acquisition of coal mines abroad.

VSP, Steel Authority of India Limited (SAIL), Coal India, National Mineral Development Corporation (NMDC) and National Thermal Power Corporation (NTPC) jointly proposed to form an SPV to acquire overseas coal mines to meet their coal requirements in the country.

Initially, all the public sector units together will put in about Rs 5,000 crore as equity in which VSP would take 15 per cent stake, Y Sivasagar Rao, VSP chairman and managing director, told mediapersons here on Thursday.

Apart from this, VSP would take 50 per cent equity in the proposed 150 Mw GTCC (gas turbine combined cycle) power plant, being set up at a cost of Rs 900 crore. NTPC would take the remaining.

"VSP produces 250 Mw captive power for its own requirements. But its power requirements are likely to go up after expansion. Keeping this future demand in mind, we are setting up a 150-Mw unit on our premises as a joint venture project with NTPC," Rao said.

Meanwhile, the construction work on the Rs 150-crore ferro alloys manufacturing unit, a joint venture with Manganese Ore India Limited, would start next month. VSP is putting 26 per cent equity in the project.

According to Rao, VSP is aiming at a sales turnover of Rs 9,000 crore during the current fiscal. It achieved a record sales turnover of Rs 6,143 crore during April-December 2006 at a growth rate of 10 per cent over the previous corresponding period, he said.

Of this, exports constituted Rs 360 crore, which was 8 percent higher compared with the last corresponding period. For the same period, VSP reported a profit before tax of Rs 1,428 crore at a growth rate of 8.6 per cent.

During nine months of 2006-07, liquid steel production stood at 2.676 million tonne and saleable steel production at 2.419 million tonne, a record since its inception. The labour productivity was 408 tonne per man year, which is also the highest for the period, he said.

Under the corporate social responsibility, VSP earmarked about Rs 7 crore in 2006-07. For 2007-08, the company would spend Rs 20 crore on this head, he added.