CSC to Raise NT$200 B. to Launch Massive Investments
2011/03/15 | By Ben ShenTaipei, March 15, 2011 (CENS)--China Steel Corp. (CSC), Taiwan's largest integrated producer of steel products, has resolved to raise NT$200 billion in the next four years to finance acquisitions of stakes in overseas coal and iron mines as well as the expansion of blast furnace in its affiliate—Dragon Steel Corp.
CSC chairman J.C. Tsou said his company currently can secure only 1% of material supply and the ratio will be elevated to 20% within the next five years. CSC executive vice president K.L. Du noted CSC's competitiveness will keep rising if the material supply can be fully secured.
CSC president C.H. Ou said a brand-new CSC is coming into shape and needs a huge pool of fresh funds to support it. The company is eager to invest in the second-stage expansion of Dragon Steel plant, a cold-rolled steel plant in Vietnam, the establishment of the third cold-rolling production line in Kaohsiung plant, and investments in overseas coal and iron mines.
With the injection of fresh funds, CSC will see a significant increase in the ratio of high-value-added products and have a tighter grip on the production of specialty steel.
Du calculated it needs NT$90 billion to complete the second-stage expansion in Dragon Steel plant, NT$30 billion to establish the third cold-rolling production line in the Kaohsiung plant, NT$15 billion to launch a new plant in Vietnam, and NT$20 billion in capital expenditure in the next four years. Moreover, investing in overseas coal and iron mines also requires huge funds.
CSC finance vice president C.H. Chang said his company will issue NT$25 billion worth of GDRs (global depository receipts) to finance investments in the years to come. To this end, the company will hold road shows overseas sometime in June after its annual general shareholders meeting.
Chang said that issuing GDRs will help CSC keep debt ratio at a safe range without impacting its credit ratings. In addition to issuing GDRs, the company is also considering getting syndicated loans from domestic banks.