BOC India has announced to raise Rs 780 Cr through external commercial borrowings (ECBs) in 2011 to execute its projects of SAIL and Tata Steel.

The loan will be funded by its parent Linde Group AG as an inter-corporate loan and would be treated as ECB.

The company's total capital expenditure plan till 2012 is Rs.1,500 Cr., which would be raised through internal accruals and debt.

The expenditure include air-separation projects - one of 2,550 tonnes per day (tpd) capacity for Tata Steel at Jamshedpur; two plants of 855 tpd capacity each at SAIL’s Rourkela plant and a 400 tpd plant for Jindal Steel and Power Ltd.

It will also invest in merchant oxygen plants with aggregate capacity of 600 tpd by 2012.

Total investment in Tata Steel project would be Rs.600 Cr totaling Linde’s investment in the country over the last three years to around Rs. 2,000 Cr.

The total cost of the Rourkela gas unit is Rs 450 Cr and till December 2009 the company had drawn Rs 117.76 Cr for Rourkela and significant part of it has been utilised for the project.

The company is close to taking up a greenfield merchant ASU with a capacity of 400 tonnes per day (tpd) at Taloja in Maharashtra.

The expenditure would be bridged by internal accruals though equity infusion is difficult.

Linde holds 89.48% of the total paid-up capital of the company and has no space left for infusion of funds through equity. Under the rules, BOC parent cannot cross the 90% equity holding ceiling (based on its market cap) unless it wants to delist the shares from the local exchanges. Linde did not have any predatory intentions and has ruled out either buy-back or delisting.

Linde has been meeting large of the capital expenditure of BOC through unsecured lending.

Its 200 tpd merchant ASU in Uttarakhand would be commissioned in few months to cater to gas needs of small units in the northern region. BOC is also involved in setting up nitrogen plant projects Kochi, Barauni, Mangalore and GNFC refineries In India.

BOC begun exporting argon to West Asian countries.

Transaction Reference: BS

Industrial gases specialist BOC started its India operations in 1935 as Indian Oxygen and Acetylene Company. It has since evolved into a subsidiary of the Munich, Germany-based Linde Group, and currently has more than 20 production facilities, including one of Asia's largest air separation units.

It supplies over 20,000 gases and mixtures, which make steel plants more efficient and help conserve the environment.

BOC's main activity include installation and testing of vacuum insulated cryogenic storage vessels, high pressure gas bullets, flow monitoring and control schemes, pressure reducing and boosting stations and gas pipelines.

Linde Group AGfounded in 1879 is an international industrial gases and engineeringcompany. It acquired BOC in September 2006.

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