Kolkata, Sept. 27
FOR now, consolidation is the name of the game for the M.L. Mittal-Pramod Mittal-promoted Global Steel Holdings Ltd. The company manages over 14 million tonnes (mt) of steel-making capacities located in five countries across Europe, Africa and the Asia-Pacific, besides India.
Global Steel holds 54 per cent of the equity stake in Ispat Industries Ltd, the India-based flagship company of the M.L. Mittal-Pramod Mittal Group. Speaking to newspersons after the conclusion of the 20th annual general meeting of Ispat Industries Ltd here on Tuesday, its Chairman, Mr Pramod Mittal, said the consolidation process in Global Steel is likely to be concluded within the next 6-9 months. Only thereafter would the performance of the subsidiary companies be reflected in the balance sheet of Global Steel. Mr Mittal said the group is open to the idea of seizing opportunities in the global marketplace. However, there are no specific acquisition plans at present. Efforts are also on to acquire iron ore and coalmines globally.
"The focus would be on acquiring raw material sources to meet our captive consumption," he said. The capacity of Ispat Industries is being augmented from around 2.4 mt a year to 3.4 mt within six months, he added. An investment of around Rs 1,100 crore would be made in Ispat Industries this fiscal. Of this, an investment of Rs 630 is in the pipeline. Funds required for the investments are being raised from internal accruals and debt. Mr Mittal said the financial closure of the power project under Ispat Energy Ltd would be completed within the next three months after "structural issues" are effectively addressed. The merger of Ispat Metallics with Ispat Industries will be completed soon. The sanction in this regard has already been received from the High Courts of Bombay and Calcutta.
Speaking on Ispat Industries' performance this fiscal, Mr Mittal said that global steel prices were down by around 25 per cent in the first two quarters. He declined to hazard a guess as to what extent this would impact the company's financials during the fiscal.
For the year ended March 31, 2005, Ispat Industries recorded a sales income of Rs 6,459.39 crore, up from Rs 4,112.42 crore in 2003-04. The profit before tax and exceptional items stood at Rs 490.40 crore in 2004-05 against Rs 60.21 crore the previous year. The profit after tax (including from exceptional items) during the year under review was Rs 696.06 crore (Rs 44.32 crore). In view of carried forward losses, no dividend was declared for the year gone by.