SAIL, which reported losses of about Rs 890 crore in the first three quarter of 1998-99, has projected its profits to progressively grow to over Rs 1,000 crore in the next five years if the turnaround plan is implemented.

The plan, if cleared by the government, would have a positive bearing on the company's profitability and in mitigating financial risks by reducing debt-equity ratio and improving debt-servicing capability, SAIL sources said.

As per the plan, SAIL has asked the government to write down value of fixed assets to the extent of capital interest accrued between 1993-94 and 1997-98 and write off loans and advances to its wholly-owned subsidiary Indian Iron and Steel Company (Iisco), the sources said.

The largest steel producer in the country has alsosought waving off of around 75 per cent of its Rs 6,069 crore loan from SDF including accrued interest in an effort to reduce high debt-equity ratio, the sources said. The turnaround plan, include short term and long term measures for operational improvements, enhancing technology and financial and business restructuring, the sources said.

They said the government, which holds around 85.8 per cent stake in SAIL, would benefit from an improvement in equity valuation, which should set the ground for future disinvestment of the company.

SAIL, which already initiated steps to restructure the company, had recently invited bids for hiving off power plants into separate entities. The process, however, could not be completed pending a final decision by the government, the sources said.