At a time when bigger names are struggling to cope with land and raw material issues, Electrosteel Integrated Ltd. (EIL) promoted by Electrosteel Castings has achieved financial closure of Rs. 5,447 crore of debt for its integrated steel project in Siyaljori in Jharkhand.

It has also roped in, as a strategic investor, a British steel company, which will pick up a 22 per cent stake for around Rs. 400 crore, Ashutosh Agarwal, head of finance told The Hindu.

The Rs. 1,815-crore equity had already been tied up with the parent company holding 39 per cent and is investing Rs. 700 crore. Some equity will also go to private equity firms.

The loan agreement between EIL and a consortium of 30 lenders was entered into on August 20 at the company’s headquarters here, a release said. The consortium was led by State Bank of India. IL&FS Financial Services is the advisor and the lead arranger.

EIL is setting up a 2.2 million tonne steel project at an estimated cost of Rs. 7,262 crore.

Mr. Agarwal said that 2,200 acres had been acquired for the project for which an MoU was signed with the Jharkhand Government in 2007. Statutory clearances are in place and iron ore and coking coal has been tied up from mines in Barbil in Orissa and Parbatpur in Jharkhand. The project expects to start commercial production by April 2010.

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