The company has been declared sick by the Board of Industrial and Financial Reconstruction (BIFR) but managed to secure a AAA (So) rating by Crisil on back of the guarantee.
The unconditional central government guarantee, merchant banking sources said, forms part of the indirect bailout offered by the government.
Its parent company SAIL has already infused around Rs 375 crore as direct financial help to the company, which is poised for turnaround in 2004-05.
The issue is a book built one with interest rates for 10 years ranging between 6.10 per cent and 6.4 per cent.
The bond could, however, be eligible for staggered redemption in the eighth, ninth and tenth years.
In order to fulfill the criteria of subscription by 49 investors as per private placement guidelines, the issue is being managed by 12 merchant bankers.
Each of these has been mandated to arrange four investors, thus making a total of 48 investors, while a major insurance company is understood to lap up the rest.
Some of the arrangers are SBI Capital Markets, DSP Merrill Lynch, ICICI Securities, SPA capital services, centrum finance, Dara Shaw.
