JSW Steel will raise $275 million (Rs 1,375 crore) through external commercial borrowings (ECBs). It will have an interest rate of Libor + 4 per cent a year .

The company has entered into an indicative, non-binding term sheet with the arranger for the ECB which will be of five years plus one day from the date of drawdown, JSW Steel said in a statement on Tuesday.

The lenders of the ECB facility shall have an option to convert in whole or in part the outstanding ECB into fully paid equity shares with full voting rights or GDRs with underlying equity shares, it added.

The floor price for conversion of the ECB into equity shares has been fixed at Rs 811.81. The initial conversion price will be at Rs 892.99, which is 10 per cent above the floor price.

The fixed exchange rate is Rs 49.2128 per dollar, it said.

The funds raised through the ECB will be utilised to buy back outstanding foreign currency convertible bonds and for capital expenditure. The company has to redeem FCCB worth $274.6 million by June.

As of December quarter, the company's gross debt on a standalone basis was at Rs 15,700 crore and net debt was at Rs 13,500 crore after taking into account the cash balance of Rs 2,200 crore on the book. On a consolidated basis, the gross debt was Rs 21,100 crore and net debt was Rs 17,730 crore.

JSW Steel reported that its net profit in the third quarter of this fiscal more than halved to Rs 168 crore even as its sales rose 36 per cent to Rs 7,860 crore.

The company's shares on the Bombay Stock Exchange were up one per cent at Rs 866 on Tuesday.

> suresh@thehindu.co.in

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