The Centre is aiming to complete strategic disinvestment of 100% stake in Odisha-based Neelachal Ispat Nigam (NINL), jointly owned by four central PSUs and two Odisha government PSUs, in a couple of months, sources told FE.
In the two-stage process being managed by the department of investment and public asset management (DIPAM), shortlisted bidders are expected to submit financial bids soon. Among others, Tata Steel, JSW Steel and ArcelorMittal are seen as key contenders for the ailing integrated steel firm.
NINL’s equity shareholding consists of Minerals & Metals Trading Corporation (49.78%), National Mineral Development Corporation (10.10%), MECON (0.68%), Bharat Heavy Electricals (0.68%), Industrial Promotion and Investment Corporation of Odisha (12%) and Odisha Mining Corporation (20.47%). The sale of the company won’t bring in any revenue to the Centre, as the proceeds will go to the stakeholders.
Due to continuous losses, production at NINL has been halted and employees have not received salaries for over a year. NINL had posted a loss of Rs 402 crore in FY19 and Rs 827 crore in the first nine months of FY20.
“Pending dues of employees will be covered by the waterfall arrangements,” a senior official said. That means, any receipts from the sale will be deposited in an escrow account to be used to pay the salary dues of the employees.
The land bank may be of interest to new investors since it may provide a ready expansion opportunity. Total land area leased to NINL at the existing facility is around 2,500 acres. The plant facilities are located at strategic location at Kalinganagar Complex, Odisha, with proximity to iron ore and other raw material. It also has been allotted a captive iron ore mine in Sundargarh and Keonjhar district of Odisha.
The Centre is hopeful that the buyer may bring in new management/ technology/ investment for the growth of the company and might use innovative methods for the development of the business operations, which might generate more employment opportunities.
Source: Financial Express