By IANS,
Chennai : Tata Steel Ltd is confident of saving at least Rs.100 crore annually once the Dhamra port in Orissa is fully operational, a company official said here Tuesday.
“We will be able to save a minimum of Rs.100 crore in costs once we start using the Dhamra port. The cargo discharge time and other activities will be faster to give us the savings,” Sanjib Nanda, chief (project finance and capital markets) at Tata Steel, told reporters.
One of the deepest ports in India, the Dhamra port is a 50:50 joint venture between Tata Steel and Larsen and Toubro Ltd.
According to Nanda, in addition to the savings, the company would earn dividend income once the port starts making profits.
Meanwhile, Tata Steel is coming out with a premium public issue at par share price ranging between Rs.594 and Rs.610 to raise between Rs.3,380 crore to Rs.3,477 crore.
The public issue opens Jan 19 and the company is issuing 57,000,000 equity shares with a face value of Rs.10 each.
According to Sandip Biswas, group head-corporate finance, treasury and investor relations at Tata Steel, the proceeds of the issue will be used for expanding the company’s facilities at Jamshedpur in Jharkhand.
Tata Steel, along with its wholly owned subsidiary Centennial Steel Company Ltd, plans to increase the crude steel production capacity of the Jamshedpur plant by 2.9 million tonnes per annum (mtpa) to 9.7 mtpa.
The balance funds will be used to retire debt and for general corporate purposes. According to Biswas, the weighted average cost of debt for the company is seven percent and the total debt is around $12 billion.