RINL may raise Rs 500 cr debt in FY'12

State-owned steel maker Rashtriya Ispat today said it may raise up to Rs 500 crore from domestic and overseas markets during the January-March quarter for meeting capital expenditure needs.

"We may raise something like Rs 500 crore in the fourth quarter of the current fiscal from Indian as well as overseas markets. This will be used for capex," RINL's Finance Director P Madhusudan told PTI.

The company had earlier projected Rs 1,800 crore capital expenditure for the current fiscal, but subsequently scaled it down to Rs 1,200 crore.

"We have already spent around Rs 600 crore on capex and the rest Rs 600 crore will be spent during the course of the remaining period of the current fiscal," he said.

RINL will use the fund for its ongoing expansion from 2.9 million tonnes per annum (mtpa) to 6.3 mtpa at its lone steel- making facility in Vizag. This is expected to be completed in the current fiscal.

RINL plans to raise funds having a tenure of 3-5 years, Madhusudan said, adding that the company does not have any long-term debt but has Rs 3,000 crore short-term working capital loans.

The company, he said, would also raise additional debt in the first quarter of next fiscal depending on the prevailing rate of interests for meeting its capex plan for 2013-14 and subsequent years.

RINL has plans to increase its capacity further to 11 mtpa, but it is yet to get the Board approval. The company, in recent times, tried in vain to get its share listed on the domestic bourses. The funds from the proposed initial public offering (IPO) are meant for the government coffers as part of its disinvestment plan.

The airline has also received three Dreamliners out of the 27 on order so far and four more are expected to join its fleet by the fiscal end.

The five B777s, which the carrier has now put up for sale, belong to the same order. The eight 777-200 LRs, of which Air India plans to sell five, are 235-seaters against the industry practice of 290-300 seats.

The idea behind this configuration was to operate them on ultra long-haul routes like Chicago, New York, Toronto etc, on premium fares, but that did not materialise.

This forced the airline to deploy them on medium haul sectors such as Hong Kong, Shanghai and London, rendering the aircraft operations economically unviable.

The aircraft, known as the Worldliner in the aviation parlance, or the one which can pair any two cities on the extremes, can fetch revenue only when operated on ultra-long routes.

In January, Air India had decided to do away with these aircraft by leasing them as soon as it got a firm indication about the delivery of the Dreamliners.

The first dry-lease tender was floated on January 2 this year but having failed to get a buyer it re-issued bids several times before finally scrapping the plan and deciding to go for an upright sale.