India Cements in fund raising mode for expansion
With buoyancy back in the market and cement prices looking up, South India’s largest cement player, India Cements (ICL) is in a fund raising mode. Sticking to its capex of over INR1100 crore, the company said it will require funds for expansion and to set up captive power plants.
To start with, Indo-Zinc (IZL), which was recently acquired by ICL has tied up a Rs 300 crore credit from Yes bank at an interest rate of 10%, for which ICL has provided corporate guarantee.
This will be used to part fund IZL’s 1.5 Mt greenfield plant being set up at Banswara in Rajasthan, at an investment of INR600 crore. The balance INR300 crore will come from ICL by way of equity and sub-ordinated debt. This project also includes a 20MW captive power plant.
ICL had acquired IZL to hasten the process of setting up its first plant in the North. IZL also has mining lease for limestone deposits in Rajasthan. Once the plant goes on stream in the middle of 2010, it will serve the markets of Rajasthan, Madhya Pradesh and Gujarat.
Company offcials also said ICL is looking at raising INR300 crore to part finance the INR500 crore capex required for setting up two captive power plants of 50MWeach.
It has awarded EPC to Thyssen Krupp for the plant in Tamil Nadu while it is in the process of selecting a contractor for the other project in AP. Once they are implemented, it will increase its captive power capacity to 200MW.
They said the company will also require additional resources to retire the Rs 380 crore FCCB which is due for redemption in 2011. Depending on cash flow and stock market conditions, it has the option of raising fresh equity. Published under Cement News
