Comments
Private steel maker Essar Steel is planning to refinance its entire domestic debt of around Rs 20,000 crore into dollar terms by September with a view to reduce interest costs, which in turn will help it to improve the margins, a top company official said.
“The focus today is to reduce our interest costs for which we are actively looking at dollarising our debt... Latest by August-September, we would like to dollarise all our debt,” Dilip Oomen, Managing Director and Chief Executive, Essar Steel said on the sidelines of India Steel-2013 Summit organised by FICCI here.
He also said this would have significant impact on its cost of funds.
“That is going to have a tremendous impact (on our profitability). Present interest cost of 12.25-13 per cent will come down to 6-7 per cent,” Oomen said, adding this will have positive impact on its margins.
The company, which had around Rs 22,000 crore in rupee debt, had received approval from the Reserve Bank to raise $430 million (around Rs 2,400 crore) last fiscal.
The company, which had reported losses in FY-12, also said the profitability is improving.
“We have produced 4.3 million tonne steel (out of the 10-mt capacity) at our Hazira unit, which is the critical mass to take production up further. Already, our profitability is showing big improvement. We have put up a 400-kv transmission line, wherein we will be able to draw independent power from the grid. This itself will give us Rs 50 crore profit (by way of savings),” Oomen said.
On completion of the 12-mt pellet plant at Paradip in Odisha, he said it is likely to be over by end of the year. The first phase of the plant with 6-mt pellet capacity is already up and running. He also expressed the hope of commissioning of the second phase will improve the bottomline.
“This will boost profitability as the impact of this on finished product is Rs 2,000 per tonne,” Oomen said.
On Hazira capacity, he said the plant will produce 30-40 per cent more this fiscal over the 4.3-mt it produced last fiscal, he said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.