The state-owned Pakistan Steel is seeking government approval to raise Rs 8,000 million ($264 million) through a public share offer.

This follows an increase in the company's authorised capital to Rs 25,000 million ($826 million) from the previous Rs 500 million ($16.5 million) at its annual general meeting in December. The full authorised amount is to be paid up through the planned share offer and funds the government had made available to Pakistan Steel in past years.

The capital increase will partly finance the company's upgrading and expansion projects, for which it is evaluating bids. European and US contractors submitted bids in July for the supply of various items of equipment, including a second-hand rolling mill and a colour coating line (MEED 6:8:93).

The scheme is aimed at increasing capacity to 3 million tonnes of steel a year from the present 1.1 million tonnes a year. Pakistan Steel plans to meet the total required investment of $1,000 million through a combination involving its own capital, a $95 million loan from the government and supplier credits.