New Delhi: State Bank of India (SBI) has sanctioned Rs 2,650 crore loan to state-run steel maker Rashtriya Ispat Nigam (RINL) for meeting capital expenditure needs.
SBI Chairman Pratip Chaudhuri handed over the first tranche of the loan amounting to Rs 500 crore to RINL Chairman and Managing Director A P Chaudhary during his visit to RINL's Vizag plant, the steel-maker said in a statement.
"Chaudhuri was in the plant on the occasion of successful completion of lending formalities. SBI has sanctioned Rs 2,650 crore of corporate loan to RINL for its capex programme," it said.
RINL is raising its steel-making capacity to 6.3 million tonnes per annum (mtpa) at its lone Vizag facility with an investment of Rs 12,500 crore. However, it has already spent Rs 9,000 crore towards the purpose.
Besides, the company plans to invest additional Rs 7,000 crore towards nmodernisation of its existing plant which would raise its capacity further to 7.3 mtpa.
A source in RINL said the company would seek additional funds from the sanctioned amount as and when it requires, but no time-lime has been given to the lender.
Meanwhile, appreciating RINL's efforts in expanding the capacity, Chaudhuri has assured all necessary support from SBI in its financial management.
"He advised RINL to go for long term borrowings to fund its capex to strengthen its fiscal position in the competitive economic scenario," the statement said.
RINL's Choudhary said the Vizag-based facility has the potential to take capacity to 20 mtpa at a single location.
"Even though (there is) lack of captive mines, RINL is earning profits since 11 years. It will be investing around Rs 5,000 crores to increase capacity in the next three to five years," Chaudhary said.