CDR cell okays Siscol's Rs 400 crore spread plan

The Coimbatore-based Southern Iron & Steel Company (Siscol) has received a nod from the corporate debt restructuring (CDR) cell of banks and financial institutions to go in for a Rs 400 crore capacity expansion.

While the Jindal group "" which has proposed to take over the management of the company "" will pump in Rs 120 crore, the balance Rs 280 will be borrowed from banks and institutions, banking sources said.

Siscol is planning to expand its capacity from 0.3 million tonne per annum to 0.6 million tonne per annum. Engineering consultancy, Mecon, conducted a techno-feasibility study and recommended a capacity expansion to make the unit economically viable. The company will have new capital equipment including a new coking oven among others.

Senior officials from the Jindal group said, "We cannot comment on the expansion proposal of Siscol at this moment as we are awaiting a response from Sebi on the takeover of Siscol." The group, through its investment company, Vrindavan Services, has filed an application with the Securities and Exchange Board of India (SEBI) for an open offer exemption.

The group is looking at acquiring a majority stake in Siscol, which is promoted by Lakshmi Machine Works (39.7 per cent) and Tamil Nadu Industrial Development Corporation (11 per cent).

The group has asked for an open offer exemption on the grounds that Siscol is sick and is referred to the Board for Financial and Industrial Reconstruction.

The total dues of the company to the group of lenders amounts close to Rs 1,000 crore. The company also has accumulated huge losess.