SPS Steel to dilute 10% stake to pvt investors

Kolkata: Ten per cent of the equity stake in SPS Steel & Power will be diluted in favour of private equity investors by the end of April. The company is part of the Rs 3,000-crore turnover SPS Group that has interests in the steel, entertainment and hospitality sectors.

In the process, the promoters of the company hope to raise Rs 250 crore. The amount raised will be ploughed back in expansion projects that have been undertaken by the company and in setting up a 250-MW coal-based power plant in Dhenkanal district of Orissa. The total investments lined up at present are pegged at Rs 2,500-3,000 crore.

Speaking to newspersons here today, Mr Bipin Kumar Vohra, Chairman & Managing Director of the SPS Group, said talks were underway with three prominent private equity investors and a firm decision on offloading 10 per cent of the equity stake in SPS Steel & Power would be taken in the next fortnight.

The exercise will be concluded by the end of April 2008.

The raw material required for the 250-MW coal-based power plant would be met from coal blocks that have been allotted to the group jointly with the Tatas.

IPO plans:

Mr Vohra said, for the next phase of investments, including expansion of cold rolling facilities, the company would come out with an initial public offering (IPO) next year. The amount proposed to be raised through the IPO has been pegged at Rs 500-600 crore.

SPS Steel & Power has already set up steel making capacities in West Bengal and Himachal Pradesh. The company’s expansion project at its steel plant in Jharsuguda, Orissa, is scheduled to be completed by December 2008.