Electrosteel achieves financial closure for steel project

Friday, 21 Aug 2009

Electrosteel Integrated Ltd achieved the financial closure of debt for INR 5447 Crores required for its 2.2 million tonnes per annum capacity integrated steel project. The loan agreement between EIL and 30 lenders was entered into on August 20th 2009 at the company’s headquarters in Kolkata.

State Bank of India is the lead bank and facility agent of the lender’s consortium. There are 29 other lenders in the consortium including HUDCO and LIC. IL&FS Finance Services Ltd is the advisor and sole arranger for syndication of the debt for the Company.

EIL is promoted by Electrosteel Castings Ltd is setting up 2.2 million tonne per annum integrated steel project at Siyaljori in the state of Jharkhand. Initially the plant was proposed to have a 1.3 million tonne per annum capacity which is now enhanced to 2.2 million tonne per annum.

EIL plant shall have all technological facilities including Sinter Plant, Coke Ovens, Captive Power Plant. Having tied up for iron ore and coking coal from its captive mine, the cost of production of steel produced by the Company is expected to be in the lowest quadrant.

The Company has already acquired the land required for the project and obtained all statutory clearances. Orders for all major equipments are already placed and the Company has started getting delivery of the same. Construction orders have also been placed on two renowned construction companies and construction activities at site are in full swing.

The estimated cost of the enhanced capacity of 2.2 million tonne per annum is approximately INR 7262 Crores. The project was appraised and approved by the lead bank State Bank of India. The Company has already tied up the required equity of INR 1815 crores for the project. Electrosteel is investing INR 700 crores in the said project by way of equity capital and will own about 39% of equity shares in EIL.

EIL’s project is among very few steel projects which have achieved its finance closure and where implementation is in an advanced stage. The Company expects to start the commercial production by April 2010.