Ramsarup Industries, wire and TMT bar manufacturer, is going for corporate debt restructuring (CDR) to attract private equity (PE) investment. The company currently has Rs 1,800 crore debt in its books out of which 95% has been put under the CDR mechanism. The total debt is unevenly distributed among a number of banks including Punjab National Bank, IDBI Bank, ICICI Bank and Axis Bank and several other smaller banks.

The Kolkata-based company plans to become a completely integrated player in the steel sector in the next one year and is currently building a steel plant at Kharagpur in West Bengal.

The company will be requiring fresh funds to the tune of Rs 700 crore including capital expenditure and working capital requirement. These funds will be utilized for completion of Steel Melting Shop to produce billets and Sinter plant to produce Sinter as this will improve the profitability of the company substantially due to production of value added products like special grades of billets including alloy steel and carbon steel. This will also reduce the cost of production substantially as the company will use iron ore fines instead of iron ore, which is currently being used now in the Blast Furnace. Commencement of Sinter plant will also the help the company in increasing the production of blast furnace and reduction of coke consumption.

These fresh funds will be raised by the means of equity infusion (including private equity) and debt. The company plans to complete the entire exercise of debt structuring including fund infusion by the end of this financial year.

Meanwhile, additional funds fund will also be utilized to upgrade and increase the production of wire division of kalyani and Durgapur. With the completion of this project the top line of the company is expected to exceed Rs 4000 crore and significant improvement in bottom line.