Ramsarup Industries to de-merge steel unit: Sources

Ramsarup Industries may de-merge its steel unit, reports CNBC-TV18's Vidhi Godiawala. Sources say the firm may de-merge its Durgapur steel unit soon. It has got lenders approval for the de-merger.

However, the steel unit is not functional yet. Sources say the majority of the funds will be diverted to this unit. The company may also bring in a strategic investor in the unit post the spilt.

The new unit will be a 100% subsidiary of the parent. 

Sources say Ramsarup Industries will need a total equity capital of Rs 250 crore. The company may bring in about Rs 50 crore via rights issue and the remaining Rs 200 crore via the proposed strategic investor.

Additionally the company will need about Rs 300 crore of term loans from banks and additional working capital loans on a need base. 

The company has a total debt of about Rs 1,800 crore, which is being casted via CDR.

Watch the accompanying video for more details.