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Our Bureau

Kolkata , Sept. 14

ISPAT Industries Ltd is expecting to strike a settlement on its $125-million convertible euro bond by October this year. The bond was issued in 1994 for commissioning the steel plant in Dolvy and was due for conversion in April 2001. The conversion, however, did not take place.

Scheduled as an unsecured loan, the total euro bond liability was valued at Rs 605 crore as on March. The amount included Rs 64.82 crore of "interest accrued and due".

Talking to newspersons here on Tuesday following the annual general meeting of Ispat Industries, the Chairman and Managing Director, Mr Pramod Mittal, a one-time settlement deal with the euro bondholders was now awaiting approval of the financial institutions and other major lenders to the company, including KFW of Germany.

"We are expecting to close the deal by October," Mr Mittal said, adding that "negotiations have already concluded with a majority of bondholders. We are expecting board approval at its next meeting scheduled next month."

While Mr Mittal refused to divulge details of the deal, industry sources said that such settlements usually took place at a high discount.

Meanwhile, in a move that could ease somewhat the ore crisis facing the company, it has acquired management control of an iron ore mine in Goa. Mr Mittal said that the mine would meet a part of the company's total demand for iron ore of roughly five million tonne.

Though not very hopeful of the outcome of its application to acquire a mining block in Karnataka, Mr Mittal said the company was looking forward to striking long-term contracts for ore supply.

The company, he said would also be able to save Rs 1,500 per tonne on ore, post commissioning of sinter plant due in March 2005. Sinter will replace a part of high cost ore and pellets. Long term contracts were also signed with a group coal mine in Bosnia for supply of metallurgical coke.

Currently having a production capacity of 2.4 million tonne, Mr Mittal said that Ispat's capacity would be enhanced to three million tonne in this fiscal. "By the middle of next fiscal, our capacity may be enhanced to 3.4 million tonne".

Talking of the ongoing Rs 4,500 crore expansion project, he said that 95 per cent of the project would be commissioned this year alone. Among the major plants scheduled to be commissioned this year were HR coil capacity expansion, coal preparation and injection plant in September, sinter plant in March 2005 and the 1,260-tonne per day oxygen plant in March 2005.

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