The Mittal brothers, Promod and Vinod Mittal, the promoter directors of Ispat Industries would continue on the board even after majority interest in the company goes to JSW Steel.
"Both Promod and I would continue on the board as non-executive directors," Executive Vice-Chairman Vinod Mittal said here today on the sidelines of EGM to seek shareholders approval for allotment of 45 per cent stake in the company to JSW Steel.
The Mittals would not participate in the open offer as they are not keen to reduce their holding in the company, he said.
Ispat Executive Director Anil Sureka said out of the fresh equity of Rs 2,157 crore infusion, around Rs 600 crore would be utilised to reduce the existing debt of Rs 6,500 crore till September 2011 and rest Rs 5,900 crore would be refinanced.
"Another Rs 600 crore would be utilised to meet financing of the ongoing projects and the rest around Rs 950 crore would be meant for working capital," he said.
Ispat would get an annual interest outgo benefit of around Rs 300 crore with fresh capital infusion of the strategic partner.
Mittal said the board strength has gone up to 15 with induction of JSW Steel Vice-Chairman and Managing Director Sajjan Jindal and Joint Managing Director and CFO Seshagiri Rao and two other independent directors in the company.
"JSW has option to increase their strength on board and it can be recasted three months later," he said.
Mittals, will hold 21.07 per cent in the company post prefernce allotment to JSW Steel.
"Its a professional decision," Mittal told shareholders when asked why LN Mittal group was not inducted to keep the company within the Mittal family.
He also declined to speak on LN Mittal group''s role, if any, as a strategic partner in the company.
Meanwhile, Mittal said the ongoing projects will begin in the next six months and would be completed in the next 24 months.
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