Financial Daily from THE HINDU group of publications
Tuesday, May 09, 2006
Financial Daily from THE HINDU group of publications Tuesday, May 09, 2006 |
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Corporate
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New Projects Nava Bharat Ferro Alloys plans Rs 350-cr expansion C.R. Sukumar
Geared for growth Expansion to offset uncertainties from ferro alloys sector Company proposes to change name to Nava Bharat Ventures Ltd Board okays proposal to issue 32 lakh warrants
Hyderabad , May 8 Nava Bharat Ferro Alloys Ltd has decided to embark upon a major expansion programme involving an investment of over Rs 350 crore during the next couple of years. The company plans to set up an integrated sugar, bio-fuel project and a cogeneration facility and a greenfield power project and expand into infrastructure through the special purpose vehicle (SPV) route, according to the company's Director (Finance), Mr G.R.K. Prasad. The expansion is being taken up to offset the uncertainties arising out of the cyclical nature of the ferro alloys sector. "We have already reduced ferro alloy contribution to overall turnover through power and sugar, and going forward, we expect the contribution of ferro alloys could be brought down to around 50 per cent," Mr Prasad told Business Line. The company, which is looking at venturing into infrastructure in a big way through the SPV route, has bid for the metro rail project (MRTS) in Hyderabad, a national highway project in Madhya Pradesh and an industry-specific special economic zone (SEZ) project. The company recently obtained the Andhra Pradesh Government's in principle approval for allocation of 250 acres of land in favour of its subsidiary company — Brahmani Infratech Pvt Ltd — for the development of an SEZ for IT and ITES. Nava Bharat Ferro Alloys proposes to set up an integrated sugar plant with a capacity of 2,500 tcd, a distillery of 40-klpd capacity and a cogeneration facility of 25MW at Shanti Ashram near the existing sugar plant. This project is estimated to cost around Rs 150 crore. The company also plans to set up a coal-based greenfield power plant in Orissa with a 60 MW capacity at an investment of around Rs 190 crore. In the power business segment, Nava Bharat Ferro Alloys proposes to pursue merchant sale opportunities and use a portion of the power generation for captive purpose. Both the integrated sugar plant and the greenfield power facility will be completed in two years, said Mr Prasad. "We currently have a power producing capacity of 100 MW, which would be doubled through the current initiatives. The sugar cane crushing capacity per day would go up to around 6,500 tcd from 3,600 tcd," he said. Keeping in view the changing business profile, the company proposes to change its name to Nava Bharat Ventures Ltd, subject to necessary approvals. The company's board at its meeting on Saturday approved a proposal to this effect. Aimed at part financing the proposed Rs 350-crore expansion, the company plans to raise funds through a preferential issue. The board has approved a proposal to issue 32 lakh warrants of Rs 2 each, convertible into equity shares at a price of Rs 95 per share.
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