Rita Singh: Comeback time

Calcutta, Nov. 21: The 2.5 lakh shareholders of Mesco Steel have something to cheer about.

The company, which delisted from the Bombay Stock Exchange in 2004, is trying to get back to business and the management is hoping to hit the profit path by the next financial year.

It has started pig iron production from its first blast furnace, while the second one will be commissioned in April 2006. The company, with Rita Singh at the helm as managing director, is eyeing a Rs 400-crore turnover from exports and domestic sales.

“Our aim is to become profitable and reward the shareholders who stayed with the company so long,” a senior official said.

The company is also trying to get re-listed on the National Stock Exchange. At present, it is listed on a few regional stock exchanges but investors hardly trade there.

“We have initiated the process. NSE has sought a few clarifications and they are being answered. The listing should take place very soon,” G. Upadhyaya, senior resident director of the Mesco Group, said.

Mesco (Mideast Integrated Steels) was incorporated in 1992 and went public in the mid-nineties. Soon after, the company landed up in a financial mess, which affected its fortunes.

In order to spruce up the image of the company in public and with lenders, Mesco has started striking deals with financial institutions to clean up the balance sheet.

Armed with financial support from Stemcor, an international metal trading giant, which recently picked up a 10 per cent stake in the company, Mesco is looking at one-time settlements to pare its debt burden.

The company has about Rs 600 crore in debt and interest burden from the secured creditors. IDBI tops the list of creditors with Rs 319 crore.

The company has reached a settlement with IDBI by promising to fork out Rs 220 crore in the next one-and-a- half years. It has already paid the first instalment of Rs 5 crore. It is also in talks with State Bank of India, Life Insurance Corporation of India, IFCI and Unit Trust of India.

Mesco has struck a deal with unsecured creditors and has paid Rs 46 crore out of a Rs 90-crore loan.

“Stemcor will arrange for funds to pay off the debts,” Upadhyaya said.

With the upturn in the steel industry as a whole, Mesco is planning to take its steel making capacity to 2.5-3 million tonnes by 2008-09.

With 60-mt iron ore deposits under its belt in Orissa where the steel plant will come up, it is in a good shape to face the next downturn.

The company is banking on the three-way joint venture ? the Singh family, UK-based Stemcor and Chinese Sinosteel Corporation ? for the technical, financial and marketing support.