Indian Seamless Metal Tubes Limited Summary Of Project Information (SPI)       Project Name    India - ISMT      RegionAsia and the Pacific   Sector   Project No10067   Projected Board DateMay 20, 2000   Company NameIndian Seamless Metal Tubes Limited   Technical Partner and/or Major Shareholders    	The Indian Seamless Metal Tubes Limited (ISMT) was promoted as a public limited company in July 1979 by Mr B R Taneja (the sponsor), who holds 36% in the company. Other major shareholders are domestic financial institutions (30%) and the public (34%).   Over the years, the Taneja Group has expanded in seamless tubes, backward integrated into specialty steel rounds/ billets (the primary input for seamless tube operations) and diversified into financial services and aircraft manufacturing.  As of March 1998, the Group had a total turnover of INR4,500 million (US$104 million).    Project Cost Including proposed IFC investment    	The total cost of the project is estimated at US$ 27.5 million.  IFC is expected to invest US$ 11.5 million by way of debt and equity/quasi-equity.     Location of project and Description of site    	ISMT is headquartered at Pune in the state of Maharashtra.  Its manufacturing operations are at Ahmednagar in Maharashtra, at a distance of about 75 miles from Pune.  The Kalyani Seamless Tubes Limited (KSTL) plant, which ISMT is proposing to acquire, is located at Baramati in Maharashtra.     Description of Company and Purpose of Project    	The project involves the modernization, expansion and financial restructuring of Indian Seamless Metal Tubes Limited, the flagship company of the Indian Seamless/B.R. Taneja Group. ISMT, incorporated in 1979, manufactures seamless tubes and pipes in India and has an installed capacity of 50,000 tonnes per annum (tpa).  In order to become a globally competitive player, ISMT plans to acquire additional manufacturing capacity and implement a capex plan of US$ 8 million aimed at modernization and rationalization of its existing capacity. The post-capex/post-rationalization capacity of ISMT will be 55,000 tpa. Further, ISMT has planned to acquire additional capacity through a merger with KSTL, a seamless tubes manufacturing company with an annual capacity of 90,000 tonnes. The merger, funded through an equity swap, will give ISMT additional capacity in the higher value added bearing and cold pilger tubes category, an entry into the Oil Country Tubular Goods (OCTG) segment and a final annual capacity of 155,000 tonnes.    	The proposed project would help achieve restructuring of 60% capacity (combined ISMT and KSTL capacity) of the Indian seamless tubes industry and will result in consolidation of manufacturing capacity under a more experienced and capable management.    The project will save the KSTL plant from shutting down (the current management of KSTL being inclined to exit from the seamless tubes industry) and thereby save jobs and productive assets.    IFCs support to ISMT would help a small but growing domestic seamless tubes company to become globally competitive in terms of size and efficiency.   IFC''s long term funding comprising debt and equity will help a merged company restructure its balance sheet to better withstand the stresses of the post merger period. With domestic financial institutions not in a position to fully fund the company''s restructuring and expansion and with promoters not in a position to provide new equity at the present juncture, IFC''s financial participation in the project becomes critical in meeting the funding gap.    Additionally IFC is expected to provide the company guidance in implementing a higher degree of compliance with environmental, social and safety issues.    Environmental Category and Issues    	This project is a Category B project according to IFCs environmental and social review procedures.  Main potential issues related to this project include: direct and fugitive air emissions, liquid effluent treatment and discharge; solid waste handling and disposal; emergency planning and response; employee exposure to dust, molten metal, and noise; and employee training.  The sponsor will be required to implement the necessary measures to ensure compliance with World Bank guidelines and policies.        The  is expected to be available from the InfoShop and locally on April 20.       Host country location of environmental documents    1. ISMT registered office,   Lunkad Towers,    Viman Nagar,    Pune    2. ISMT plant,   MIDC,    Ahmednagar    3. KSTL plant,   MIDC,   Baramati      Date SPI sent to InfoShop April 14, 2000   This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 974-4384      Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).