Kolkata, Feb 3: P K Mittal and V K Mittal promoted Ispat Industries Ltd proposes a 40 million tonne capacity minor port at its existing facility near its Dolvi plant to be developed over the next five to seven years.

"Ispat has applied with the Maharashtra Maritime Board seeking minor port status for the existing 10-million tonne capacity jetty," sources said.

Financial details for the port has not yet been finalised as the proposal is at the initial stage, sources said, adding that similar projects required an investment of about Rs 2,500 crore.

As investment to convert the existing facility into a port was huge it would have been difficult to use Ispat's balance sheet to fund the project, source said.

However, it did not rule out the possibility of raising fund through initial public offering and private equity to secure resources for the project.

After receiving the Maharashtra Maritime Board's approval the company will approach the Shipping Ministry for required clearances.

Ispat had said it would invest around Rs 1,000 crore till 2009 in its ongoing projects.

"The company will raise about Rs 800-900 crore through preferential issue to promoters and Foreign Currency Convertible Bonds shortly," a company official had said.

The company board has also decided to hive-off its jetty operations to an independent entity to help attract investors for the project.

Mott MacDonald has been appointed as consultant for valuation of the jetty operation, a company spokesperson said.