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JSW Steel to raise $600 million from overseas market

MUMBAI: JSW SteelBSE -0.95 % is planning to raise around $600 million through external commercial borrowing (ECB) route, part of which will be mopped up in the current quarter, a top company official said today. 

"We plan to raise around $600 million through ECB route in order to align our
rupee and dollar denominated debt at around 50:50 ratio. Part of this total amount is likely to be raised in the current quarter," JSW Steel Joint Managing Director and Group Chief Financial Officer Seshagiri Rao told reporters here. 

This will also reduce the interest outgo of the firm through reduction in average interest cost, he added. 

As per the private steel firm, the average interest cost of the company stands at around 8.25 per cent and post-fund raising, it will be reduced by around one percentage point. 

By the end of September quarter, JSW Steel has a net debt of Rs 30,435 crore with a debt to equity ratio of 1.44. While 39 per cent of the debt book comprises foreign debt, the rest is in rupee terms. 

Rao said the company intends the rupee debt to foreign currency debt at 50:50 ratio going ahead. 

Meanwhile, JSW Steel said most of its loans are long-term in nature and it doesn't have any repayment liability out of expiry of any short-term loan. 

Referring to bidding for Stemcor assets, Rao said the company will submit its bid by November 18. 

JSW Steel, along with 
Tata SteelBSE -0.41 %, Essar Steel, JSPL, Bhushan Steel and Aditya Birla Group firm Essel Mining, is in the fray to acquire assets of Stemcor, which is looking to hive off its Indian assets. 

Talking about raw material pricing, Rao said, while iron ore rates are showing a downward bias, coking coal prices are likely to stabilise at the present level.