Tisco to raise Rs 5,000 cr

Tata Iron and Steel Company Ltd informed BSE today that its shareholders had, at the extra ordinary general meeting of the company held on March 24, 2005, authorised the board to raise upto Rs 5000 crore in fresh resources to fund the company's expansion and acquisition plans.

Tisco sources refused to comment on the development.

Sources in the market said informal discussions had been initiated in this regard but concrete deals had not been signed.

The company can issue, offer and allot securities through public issue or on a private placement under Section 81 of the Companies Act, 1956, through securities upto a limit of Rs 5000 crore including face value and premium in one or more currencies.

The Tisco board has also been empowered to borrow over and above the existing borrowings of the company upto a limit of Rs 10,500 crore.

Tisco has been looking at several opportunities, the most immediate of which were its investments in Bangladesh.

Tisco was exploring the possibility of producing a range of products in that country to cash in on the low cost of energy.

A secondary steelmaking route was likely to be adopted owing to the lack of iron ore there but the robust local market there would compensate for the shortcoming, said sources.