Essar Steel’s net loss has more than doubled in the last fiscal to Rs 2,784.94 crore as its performance was impacted by host of reasons including lower sales and rise in interest payments.

The flagship firm of Essar group had posted a loss of Rs 1,251.56 crore in 2011-12.

Net sales declined by over 7 per cent to Rs 14,898.35 crore during the last fiscal vis-a-vis Rs 16,056.53 crore of FY12, it said in a statement to the BSE.

The statement of the company, which is not listed on stock exchanges, was part of the filing related to its debt securities.

During the last fiscal, its interest payments rose nearly 41 per cent to Rs 3,139.88 crore.

Besides, total expenditure of the company, at Rs 15,079.51 crore, overshot its net sales last year as depreciation of Essar’s assets increased by over 58 per cent to Rs 1,562.21 crore.

Moreover, the company also incurred a one time loss of Rs 1,346.55 crore last year on account of stabilisation of its new units. All these factors led to Essar reporting a net loss of Rs 2,784.94 crore during the last fiscal.

However, the company appeared confident that in the coming years it will return to profit making due to various measures already taken. This includes steps taken to improve its liquidity.

According to Essar, the excess of its current liabilities over its current assets include short term borrowings of Rs 4,287.10 crore and current maturing of long term debts of about Rs 2,544.29 crore.

To increase liquidity, the company has plans to raise loans of longer tenure and convert some of its rupee debt into dollar loans through external commercial borrowings and export securitisation, Essar said.

The company added that it already has RBI permission to raise up to $2 billion through export securitisation.

Besides, it also has sanction letters of about Rs 1,555 crore from its lenders but the money will be drawn in a phased manner.

The company has recently expanded its steel production capacity to 10 million tonnes per annum (MTPA) from 4.6 MTPA and Essar is currently under process of integrating all the facilities.

The 10 MTPA steel capacity was envisaged as an integrated facility with dedicated iron ore pellet supplies from a pellet plant in Odisha, a dedicated port, coal based power plant and a 400 kva transmission line.

However, the Odisha pellet plant and construction of transmission line got delayed due to delay in obtaining certain regulatory approvals. This has led to delay in integrating all its facilities, Essar said, adding that the integration is expected to be completed soon.

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