Business Line reported that Rashtriya Ishpat Nigam Limited has re activated preparation for its mega long term borrowing plan. As a beginning, it has hired two credit rating agencies India Ratings and Crisil.

Mr P Madhusudan director finance of RINL said that after the ratings were available, the decision for the 2012-13 tranche would be firmed up.

The INR 22,500 crore term loan plan, mooted first in mid 2011 was later on put on hold due to a depressed market. Early this year, the RINL Board chalked out a 10 year roll out programmed beginning with the current year.

The credit rating agencies are expected to complete their first exercise by December.

Earlier, given the short time window available, the company had decided that that the current year’s long term borrowing size would be limited to INR 1,500 crore in synch with capital expenditure plans for the early part of 2013-14.

Currently, RINL does not have any term loan in its books. But it has resorted to short term borrowings of about INR 3,000 crore, principally to meet working capital requirement. The short term loans tenures are also favorably poised at this moment. Though the loan duration varies between 30 days to a year, 180 day borrowings are predominant.

So far, internal cash generation saw the steel maker through the graded expansion programmed. However, indications suggest that cash flow for the unlisted RINL this fiscal could be lower than that last year.

Source - Business Line

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