Promod Mittal-controlled Global Steel Holding, which owns over 50 per cent in Indian steel maker Ispat is planning to invest over $450 million (Rs 1919.48 crore) in Nigeria to double the steel production capacity in the African country.
The company is in talks with a consortium of European banks to raise the fund, said S K Manwati, CEO of Global Steel Holdings, which is the holding company of Ispat Industries.
The company is expanding the capacity of its Delta Steel from the current 1.3 million tonnes to 2.4 million tonnes by 2010. Ispat holds over 80 per cent equity in Delta Steel.
The company will raise $350 million through debt and the remaining will come from internal accruals.
Currently Global Steel and Ispat together has got over 14 million tonne capacity globally, he said. Other than Nigeria, the company has steel plants in Bulgaria, Philippines, Libiya and Bosnia.
The company has put on block its Bulgarian plant, for which Arceler Mittal and Russian steel major SeverStal are bidding.
Global has already made over $475 million investments in Nigeria for three steel plants, including Delta. Global has consessional ownership for the development of two plants including Ajaokuta Steel Company, the biggest steel plant in Nigeria and National Iron Mining Company. Ajaokuta alone has a production capacity of over 4 million tonne.
Recently, the Nigerian Government has cancelled the concessional agreement with Global Steel. The Mittal group has approached International Court challenging the government's decision and the case is under arbitration now.