The MMTC and Orissa government-promoted Neelachal Ispat Nigam Ltd (NINL) is set to commission a Rs 1,885 crore- steel making facility at its Kalinganagar unit by September this year, six months behind the schedule.
NINL, which at present produces about 5.7 lakh tonnes of pig iron (crude iron produced in a blast furnace) will record an output of 8.5 lakh tonne of billets per annum, to be converted into bars and rods at a later stage, after commissioning of the facility.
"Our steel making facility will start trial production by September," NINL Managing Director P C Sahu told reporters here today.
Earlier, the commissioning of the project, which is in the second phase of expansion of NINL, was scheduled by March 2011.
"We hope to stabilise billet output and run on full capacity by March 2012. We may take up wire rod production in the next fiscal. Value addition from pig iron stage to billet, and other steel items would come in phases. This is designed to increase profitability," MMTC CMD H S Mann said.
MMTC has 49.78% stake in NINL, while the other major partner Orissa government owns 26.7% share in the company.
The funds for the Rs 1,855 crore-project, including Rs 350 crore iron ore mining programme, has already been tied up by NINL through rights issue proceeds, internal accruals and issue of bonds and borrowings from the banks.
"As of now, we have received around Rs 350 crore from additional equity. We have reserves of around Rs 400 crore. And the balance would be debts, including bonds," Sahu said.
"MMTC had originally put in Rs 200 crore in the joint venture, and another Rs 200 crore has been invested by way of 1:1 rights issue at per share of Rs 10," Mann said.
Replying to a question on if there was a possibility of MMTC selling its stake in the firm, Mann said there had been some negotiations regarding a proposed buy-out of MMTC's stake in NINL by SAIL and RINL but this could not materialise.
"... Nothing concrete has emerged so far. There had been certain differences of opinion regarding the valuation," Mann said.
