Post-bailout issues: Steel mill opens LCs to buy coal, iron ore

Credit lines were obtained after release of bailout fund.


Our Correspondent August 30, 2012

KARACHI: Pakistan Steel Mills (PSM) – the country’s largest industrial entity – has opened two letters of credit (LCs) for the purchase of 0.11 million metric tons of coal. These LCs were opened on release of the first tranche of the bailout package announced by the government as per the business plan of the steel giant.

National Bank of Pakistan established the line of credit for the purchase of two shipments of coal from Australia and Canada of 55,000 metric tons each, a PSM press release on Thursday said.

PSM is currently in dire need of raw materials including coal and iron ore – primary ingredient in steel production – which are being imported from Canada and Australia.

PSM CEO Major-General (retd) Mohammad Javed commended the efforts of the PSM’s finance department for its role in the arrangement of LCs through the bailout package.

He hoped that after the continuous availability of raw materials; production levels will improve as per the business plan. These coal shipments will reach the Pakistan Steel jetty in the coming months to streamline the process of the mill, he said.

The Rs3.8 billion – first instalment – of the Rs15 billion bailout package was released to the PSM to cover the purchase of raw materials and July salaries of its employees.

The PSM suffered Rs21.4 billion losses during fiscal year 2011-12, ended on June 30, the second highest in the last four years, which swelled the accumulative losses incurred by it to Rs71.4 billion.

Published in The Express Tribune, August 31st, 2012.

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