Bhushan Steel is planning to raise Rs. 475 crore through a rights issue, in the third week of this month, the company’s Director (Finance) Nittin Johari said on Tuesday.

The company plans to use the funds to part-finance its expansion activities, particularly in Orissa, he added.

The city-based steel-maker will be issuing one equity share at a price of Rs. 335 for every 15 equity shares held by its existing shareholders through this issue. It may also write-off part of its over Rs. 22,000 crore debt through the fund raising.

Bhushan Steel currently has a production capacity of 2.5 MTPA (million tonnes per annum) and it produces secondary steel products like cold-rolled coils, galvanised coils and colour-coated coils, from its three manufacturing facilities in Uttar Pradesh, Maharashtra and Orissa.

Last week, Bhushan Steel had sought its shareholders nod through postal ballot to raise US $ 1 billion (over Rs. 5,400 crore) through issue of fresh securities. Post shareholders approval, it will decide the dates and ways to raise funds through issue of fresh securities.

As on September 30, the company had long-term borrowings of Rs. 19,584.71 crore and short-term borrowings of Rs. 4,064.54 crore. During the first half of the current fiscal, Bhushan Steel has reported a net profit of Rs. 407.48 crore and net sales of Rs. 5,395.55 crore. The price of the share stood at Rs. 486.60 apiece on the Bombay Stock Exchange.

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