The Hindu Business Line : Surana Industries close to buying coal mine in Indonesia

OVERSEAS BUY: Mr Dinesh Surana (left), Managing Director, Surana Industries Ltd, and Mr G.R. Surana, Group Chairman, at a press conference in Chennai on Tuesday. — Bijoy Ghosh

Chennai June 19 Surana Industries Ltd is in the final stages of negotiations to secure a long-term lease for a coal mine in Indonesia, the company's Managing Director, Mr Dinesh Surana, told Business Line today.

When that happens, the mine would serve as a source for the key raw material for Surana Industries' upcoming 5,00,000-tonne integrated steel plant at Raichur, Karnataka.

The project has got Rs 331 crore of debt funding from banks. It is understood that Indian Overseas Bank has lent for the project. The bank has also picked up 31,818 shares of the company.

Incidentally, General Insurance Corporation and United India Insurance have 1.75 per cent and 3.69 per cent stake in the Rs 29-crore paid-up capital of the company.

In 2006-07, Surana Industries achieved a turnover of Rs 778 crore (Rs 625 crore in the previous year) and a net profit of Rs 30 crore (Rs 23 crore).

FCCB issue

The company today announced that had raised $25 million through a FCCB issue for the Rs 473-crore Raichur project. These bonds, listed on the Luxembourg stock exchange, will be converted into equity shares at a price of Rs 140 per share.

The share price of Surana Industries today closed on the BSE at Rs 119.55, up 4.96 per cent from Rs 113.90 on Monday. The 52-week high price was Rs 123 on January 19.

The Raichur plant is expected to be production-ready by March 2008. The company has projected a turnover of Rs 1,200 crore and a net profit of Rs 100 crore in the first full year after the plant's going on stream.

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