The Hindu Business Line : Visa Steel's Orissa plant to cost Rs 1,800 cr in phase I

Kolkata June 19 The capital expenditure for the first phase of Visa Steel Ltd's integrated steel plant at Kalinganagar in Orissa has increased from Rs 1,400 crore to Rs 1,800 crore, following the proposed addition of a 0.5 million tonnes per annum (tpa) wire rod mill and an increase in the power plant capacity from 50 MW to 75 MW.

Mr Vishambhar Saran, Chairman of Visa Steel, said at a press conference on Monday that for the first phase of the project — expected to be completed by end-2008 — Rs 945 crore had been "committed".

The entire project would entail capital expenditure of Rs 4,500 crore. Besides a 1.5-million tpa steel plant, other facilities such as a 50,000 tpa ferro chrome plant, 300,000 tpa sponge iron plant, 75 MW power plant and 0.5 million tpa special steel plant would be set up.

The project would be funded through a debt equity ratio of 65:35.

Mr Saran said Visa Steel had signed a memorandum of understanding (MoU) to set up a steel plant in Chhattisgarh and another MoU would be signed with the Jharkhand government for a steel plant in that State. Visa Steel was also interested in joint ventures and acquisitions, he said, adding that proposals for joint ventures had been received from Chinese and European companies.

"There has been no definitive agreement with anyone in this regard. If and when it happens, it will be through a separate special purpose vehicle," he said and firmly ruled out diluting Visa Steel's stake in anyone else's favour.

During the year ended March 31, 2007, Visa Steel earned revenue of Rs 537.93 crore, up from Rs 387.46 crore in 2005-06. Profit before tax was Rs 34.31 crore (Rs 20 crore) while profit after tax was Rs 20.52 crore (Rs 12.48 crore).

Mr Saran said that in the current year revenues would be driven by the company's coke and ferro chrome business.