West Coast Paper to raise $40mn from IFC

The West Coast Paper Mills Ltd (WCPML), a manufacturer of paper and paper board, is raising $40 million (about Rs 182 crore) from the International Finance Corporation (IFC), the private lending arm of the World Bank.

The money will be used to fund the company's expansion and modernisation at its paper mill in Dandeli in Karnataka.

The company proposes to increase its paper making capacity from around 1.64 lakh tonnes per annum to 3.2 lakh tonnes per annum. It also plans to modernise its fibre line to make paper pulp. The modernisation will be completed by March 2009. The company aims to improve the plant's efficiency and enhance competitiveness with the modernisation.

"We are planning to invest Rs 1,100 crore on our modernisation and expansion. We are also in talks with the State Bank of India (SBI) and ICICI Bank for a syndicated loan of Rs 725 crore and we hope to conclude the deal in about a month," company sources told Business Standard.

It aims to pool in another Rs 175 crore from the internal accruals to fund the project, while the remaining Rs 200 crore will come in the form of equity, he said.

West Coast Paper Mills Ltd reported a net profit of Rs 64.84 crore for year-ended March 31 last, a growth of 102 per cent compared to the previous year. Its turnover marginally went up by 4.5 per cent during the year.