The Hindu Business Line : Prakash Ind signs pact with Chhattisgarh Govt

New Delhi, Aug. 28 The New Delhi-based Prakash Industries Ltd, a diversified business house with interests in steel, power and mining, would be investing around Rs 2,145 crore for setting up an integrated steel plant, power plant and a coal washery in Chhattisgarh.

The company has signed a memorandum of understanding with the Government of Chhattisgarh in this regard.

“The steel plant would have an installed capacity of 1.2 million tonnes per annum (mtpa) and a 560-MW captive power plant and a coal washery of 3 mtpa,” a source close to the development told Business Line.

This is the second MoU that the company has signed with the State Government. Earlier, it had signed a MoU for investments of Rs 1,017 crore for establishing various plants such as a coal-based sponge iron, steel melting shop, mini blast furnace, sub merged arc furnaces, and a structural rolling mill in the State.

The source added that as per the MoU, the plant should be operational in the next two years.

He, however, did not divulge the details on how the company would be raising the capital required to meet the investments.

For the last fiscal year, Prakash Industries posted a net profit of Rs 133 crore on a turnover of Rs 1,048 crore. The company is engaged in the steel, power, PVC pipes and black and white picture tubes businesses.

“As part of the MoU, just like other companies which have signed similar agreements, the State Government would be providing tax incentives, look into the issue of allotment of mines and other facilities,” the source said.

Land acquisition

The company, it is learnt, has also acquired the land required for setting up the facilities and is also in talks with the Government for the additional land that is required to complete the projects.

Prakash Industries, on Monday, informed the BSE that it had issued preferential issue of warrants worth Rs 44.44 crore to Barclays and a few domestic investment firms.

“The board of directors approved the issue of 5.55 million warrants to Barclays and others, subject to the permission of the shareholders.

The warrants would be priced at Rs 80 a piece and they could be converted into equal number of equity shares within 18 months,” the company said in its filing.

The company would seek the shareholders’ permission on the proposed transaction at an extraordinary general meeting to be convened on September 19.

At the moment, the promoters have a 67 per cent stake in the company, which is expected to come down after the conversion of warrants.

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