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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (8012)	10/8/1999 9:41:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

CompanyWatch:KUDREMUKH Iron Ore Co - Plans private placement kudremukhore.com 'Legend and wild beauty, Kudremukh, in the State of Karnataka, is known to have one of the largest deposits of iron ore in the world.' KIOCL plans pvt placement to fund pig iron venture Our Bureau (bl) BANGALORE, Oct. 8 KUDREMUKH Iron Ore Company Ltd (KIOCL), a 100 per cent export-oriented unit, is planning to try the private placement route to raise Rs. 57.4 crores to part finance the joint venture project for pig iron and ductile iron spun pipes (DISP). The project, of which the total cost is estimated to be Rs. 328.2 crores, will have equity capital of Rs. 111.4 crores and the balance is to be raised through debt. The joint venture has as partners Mecon and Metal Scraps Trading Corporation each with a contribution of Rs. 2 crores while KIOCL has the majority stake with Rs. 50 crores. Though there has been a slight delay in completing this project mainly due to funds constraint owing to banks capping disbursement of term loans and the company's inability to raise public equity component of Rs. 57.4 crores, it has not resulted in any substantial cost overrun. As per the revised schedule, the pig iron component of the joint venture is expected to commence production by the end of next year while the DISP division is expected to start production by the year 2001. The company is now negotiating with some overseas partners for its DISP component and hopes to finalise the plans by next month to initiate the process for implementation of the project. Talking to Business Line about the project, Mr. S. Murari, Chairman-cum-Managing Director, said the company would be seeking collaboration for either marketing or technical assistance and equipment requirements of the project estimated to cost about Rs. 80 crores. KIOCL, which faced some bottlenecks in continuing its current business due to the expiry of mining lease, however managed to obtain a temporary permit for a year till July next year. The Karnataka Government has also recommended KIOCL's request for renewal of the mining lease for a further period of 20 years. It is also exploring the new sites for its future expansion. Meanwhile, KIOCl has come up with an alternative site plan for its proposed 65 MW furnace oil-fired captive power project. The Rs. 287-crore project was originally scheduled to be located near its existing ore beneficiation plant at Kudremukh. But due to some technical snag of locating it in a virgin area which might throw up problems of environmental issue, it has identified another site between Kudremukh and Mangalore. This will be necessary only in case the company cannot come up with a site in the Kudremukh mining area. The decision will not, however, affect the schedule of the implementation of the project. KIOCL has already shortlisted three consortia - Hyundai-Tata Projects Ltd, Nippon-Wartsila and BHEL-Wartsila. The three have already submitted technical bids for the project. KIOCL has also informed them of the alternative site plan based on which the consortia will submit their financial bids. The relocation, if necessary, will also not affect the overall cost parameters, Mr. Murari said. The captive power plant will help KIOCL step up its production and productivity as the erratic power supply from the Karnataka Electricity Board is affecting not only the production process but also causing damage to the plant, it was said.