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MSP Steel and Power Ltd of Kolkata has drawn up a Rs 388 crore expansion plan that is divided into two parts. The first project envisages setting up a 350-million tpa sponge iron plant, an 18-mw captive power plant, a 3.83-lakh tpa coal washery and a 1.86-lakh sqft colony (Rs 233 crore) and the second project entails setting up a 30-mw power plant (Rs 149.50 crore).
"The first project, which will be financed through debt and internal accruals, has been approved by the bankers and disbursement has already started. We have syndicated Rs 155 crore with a consortium of four banks, namely State Bank of India (Rs 60 crore), Oriental Bank of Commerce (Rs 30 crore), Allahabad Bank (Rs 30 crore) and Indian Overseas Bank (around Rs 35 crore). The balance Rs 78 crore will be financed through internal accruals," Kamal Kumar Jain, Head - Finance & Accounts, MSP Steel and Power Ltd, told Projectmonitor.
According to Jain, the second project would be financed through a bank loan of Rs 99.50 crore and internal accruals of Rs 50 crore. The sanction from the bankers had been received and final syndication was expected within a fortnight.
Of the 18-mw captive plant, about 12 mw will be based on waste heat recovery and 6 mw will be coal based. The project is expected to be completed by the end of 2011. "We plan to sell the power generated in the open market," Jain said. The sponge iron plant is likely to be ready by the end of 2012.
"The company has been allotted coal and iron ore blocks in Madanpur and Kanker districts of Chhattisgarh, respectively. The coalmine covers an area of about 7,13,952 hectares and the iron ore block about 150 hectares of land," he explained. The coalmine is expected to be operational by September 2010.
The proposed expansion will enhance the company's sponge iron capacity from the existing 1.92 lakh tpa to 4.23 lakh tpa, coal washery from 3.45 lakh tpa to 7.29 lakh tpa, captive power plant from 24 mw to 72 mw, and railway sliding from 2.4 km to 4.4 km.
MSPL currently has manufacturing facilities in West Bengal, Orissa, Jharkhand, Andhra Pradesh, Chhattisgarh and Maharashtra.
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