RINL may raise funds for expansion

Rastriya Ispat Nigam Ltd (RINL) will wipe out its entire accumulated loss of about Rs 1,000 crore in four to five months time said, according to Y Siva Sagar Rao, chairman and managing director.

Rao told the media recently, ''Our main goal is to wipe out the entire accumulated loss of Rs 900-1,000 crore in four to five months time. We have got sufficient fund to start our expansion work''.

The company was on an expansion mode which would require investment of around Rs 8,250 crore.

To a question on the possibility of RINL tapping the capital market to fund its expansion plan, he said that most of the money for expansion would be mobilised through internal accruals and the company might have to mobilise Rs 2,500 crore from outside.

''We will take the decision at an appropriate time,'' he said.

Company sources said that RINL was weighing various options like going for domestic or foreign loan, IPO or supplier credit.

The expansion programme would stretch till 2007-08. This would take its capacity to 6.5 million tonne from the existing capacity.

Further, with some addition and modernisation at a cost of Rs 500 crore the plant's capacity would go upto seven million tonne.

Commenting on financial performance, Rao said that the company was likely to post a profit of about Rs 1,900-2,000 crore during 2004-05.