SAIL expects to take the special purpose vehicle (SPV) route for the revival of the Sindri unit of Fertiliser Corporation of India (FCI).

The company proposes to set up three SPVs by roping in different strategic partners to set up a steel plant, a fertiliser unit and a power plant after dismantling the defunct FCI unit at Sindri, which stopped production in 2002.

The state-run steel maker plans to retain a minimum of 51 per cent stake in the SPVs, sources said. Such a move would lend a public sector character to the venture.

Projects planned

SAIL proposes to set up a 5.6-million-tonnes-per-annum greenfield steel plant with an investment of Rs 26,000 crore. A 1.15 mtpa fertiliser unit is being planned with an investment of around Rs 4,500 crore. Also, a power plant with an investment of Rs 4,000 crore is being planned at the proposed site.

The Cabinet Committee on Economic Affairs recently approved SAIL's proposal to revive Sindri unit, which envisages an investment of around Rs 35,000 crore.

SAIL expects to fund the revival plans through a major debt component, sources said. A debt-equity ratio of 80:20 is being contemplated for the SPVs, wherein the total outgo for SAIL in the form of equity would be around Rs 7,000 crore, sources added.

The SAIL scrip gained 1.38 per cent to close at Rs 106.65 on the BSE on Wednesday.

SAIL may seek iron ore mines from the Jharkhand Government to ensure raw material security for the steel project, sources said. The proposed steel plant will have a diversified flat product-mix to cater to sectors such as oil and gas, automobile and power.

SAIL is reportedly preparing a pre-feasibility report for the proposed projects, while it may soon engage a consultant to prepare a detailed project report. From the time it is granted all clearances, SAIL expects to complete the project over a 42-month period.

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