Coal news and updates

B K Birla group flagship Kesoram Industries is planning equity infusion to complete its tyre capacity expansion and to invest in limestone mining for its cement division. Relying solely on debt for funding would be an issue as the debt-equity ratio stands high at 6:1.

 

The company, however, would raise some debt to part fund its planned Rs 600 crore capex this year, months after repaying half of its Rs 4,300 crore debt out of proceeds from the sale of a tyre plant to J K Tyre earlier this year.

"For this fiscal, capex would be about Rs 600 crore, of which Rs 350 crore would in tyre and Rs 250 crore would be in limestone mining for cement. We are deciding on what would be the extent of the equity for the project," finance director Tridib Das said.

 

While Kesoram has pared its debt by almost half since April after selling its Laskhar plant, loans are still high.

 

"The debt is still very high at Rs 2,200 crore but is reasonable considering the level of debt at over Rs 4,000 crore some time back. We may raise some equity although nothing has been decided," Das said on the sidelines of the annual general meeting of the company.

 

The head patriarch B K Birla, however, is not in good health and skipped Thursday's annual general meeting chaired by his daughter, vice chairperson Manjushree Khaitan. The nonagenarian industrialist is believed to be staying in Mumbai. This is the second consecutive annual general meeting that he did not attend.

 

The passenger car radial tyre project investment had been work-in-progress for some years as there were some issues but is now nearing completion.

 

"It's now over and we are working on building that manufacturing facility in Balasore which we do expect that by the end of this year we will be ready and early next year we would come up with commercial production," Das said.

 

Kesoram, through its Birla Tyre division, is a strong player in truck and bus bias tyre and would also be present in truck and bus radial tyres through outsourcing even though it has divested the Laskar plant.

 

Similarly, two-wheeler and three-wheeler tyres would be manufactured at Balasore and the company would also import some of its requirement.

 

Regarding limestone mining for its cement capacities, Kesoram plans to start work on its existing mining rights near its cement plant.

 

"We would be acquiring land to work on the mine lease on which our Vasavdatta plant is situated," he said.

 

Kesoram has licences for two limestone quarries with a total area of approximately 2,369 acres for its Vasavadatta plant in Karnataka and at Kesoram plant in Andhra Pradesh.

Source: DNAIndia