Government on Monday approved sale of 93.7% stake in Neelachal Ispat to Tata Steel Long Products at an enterprise value of Rs 12,100 crore.
Neelachal Ispat Nigam Ltd. (NINL) is a joint venture of 4 CPSEs, namely MMTC, NMDC, BHEL, MECON and 2 Odisha Govt. PSUs, namely OMC and IPICOL. NINL has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha. The company has been running in huge losses and plant is closed since March 30, 2020. The company has huge debt and liabilities exceeding Rs 6,600 crore as on March 31, 2021 including huge overdues of promoters (Rs 4,116 crore), banks (Rs 1,741 crore), other creditors and employees. The company has negative networth of Rs 3,487 crore and accumulated losses of Rs 4,228 crore as of March 31, 2021.
"Government of India does not hold any equity in the company. However, on the request of the Boards of selling shareholder PSEs and on concurrence by the Govt of Odisha, CCEA ‘in-principle’ approved strategic disinvestment of NINL on 8.1.2020, and authorised Department of Disinvestment & Public Asset Management (DIPAM) to undertake the transaction," said Ministry of Finance in a statement.
The transaction was made through an open-market, competitive bidding process towards the enterprise value of the company, comprising the liabilities of the company as on 31.3.2021 and the 93.71% equity of the company held by the 6 selling PSE shareholders. The transaction was executed through the extant consultative multi-layered decision mechanism-based procedure involving Inter Ministerial Group (IMG), Core Group of Secretaries on Disinvestment (CGD) and the empowered Alternative Mechanism. Govt. of Odisha with their companies, OMC & IPICOL having stake of 32.47% was also part of the decision-making at every stage.
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