The Hindu Business Line : Nava Bharat to raise long-term funds for expansion

Having firmed up a major expansion programme involving an investment of over Rs 350 crore to be spent in the next two years, Nava Bharat Ferro Alloys Ltd (NBFAL) is now planning to raise funds to part-finance the expansion programme.

The NBFAL board is scheduled to meet on May 31 to consider raising long-term resources through issue of equity/ foreign currency convertible bonds (FCCBs)/ depository receipts (GDRs/ADRs) or other convertible securities by placing them with qualified institutional buyers.

The board, apart from taking on record the audited financial results for the fiscal ended March 2006 and recommend dividend, would also consider employee stock option scheme.

When contacted, the NBFAL Director (Finance), Mr G.R.K. Prasad, told Business Line that the company may go in for a maximum of $50-million fund raising programme.

The company needs funds to expand capacities in sugar and power divisions. However, he said, the board would decide the exact size of the issue, timing and the investment banker on May 31.

Foray into infrastructure

The company proposes to set up an integrated sugar, biofuel project and cogeneration facility and a greenfield power project.

Further, it also plans a major foray into infrastructure through special purpose vehicle (SPV) route.

NBFAL is setting up an integrated sugar plant at Shanthi Ashram near the existing sugar facility with a capacity of 2,500 tcd, distillery of 40-klpd capacity and cogeneration facility of 25 MW.

According to Mr Prasad, this project is estimated to cost around Rs 150 crore.

This takes the company's total cane crushing capacity per day to 6,500 tcd from the existing 3,600 tcd.

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.

Following the expansion, its overall power producing capacity would reach 200 MW from 100 MW now. Both the sugar and power expansion programmes would be completed in two years, Mr Prasad said.

More Stories on : New Projects | Sugar | Power

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