The government of India (GoI) approved the sale of ~93.71 percent stake in Neelachal Ispat Nigam Limited (NINL) to Tata Steel Long Products (TSLP) Limited, at an enterprise value of Rs 12,100 crore.
- This is the 1st instance of privatisation of a public sector steel manufacturing enterprise in India.
About NINL:
i.The NINL has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha. It is a joint venture of 4 CPSEs (Central Public Sector Enterprises), namely MMTC, NMDC (National Mineral Development Corporation), BHEL (Bharat Heavy Electricals Limited), MECON, and two Odisha government state PSEs, namely OMC (Odisha Mining Corporation) and IPICOL (Industrial Promotion and Investment Corporation of Odisha Limited).Â
ii.The Odisha government has 32.47 percent stake in NINL through IPICOL and OMC, whereas the MMTC holds the 49.78 percent share.
iii.The company has been running in huge losses and plant is closed since March 30, 2020. As of March 31, 2021, it has huge debt and liabilities exceeding Rs 6,600 crore including huge overdues of promoters (Rs 4,116 crore), Banks (Rs 1,741 crore) and a negative networth of Rs 3,487 crore and accumulated losses of Rs 4,228 crore.
Key Points:
i.GoI does not hold any equity in the company. On the request of the Boards of selling shareholder PSEs and Govt of Odisha, Cabinet Committee on Economic Affairs (CCEA) ‘in-principal’ approved strategic disinvestment of NINL in 2020.
ii.The Department of Disinvestment & Public Asset Management (DIPAM) was authorised to undertake the transaction.
iii.Financial bids for buying NINL has been placed by Consortium of Jindal Steel & Power Limited and Nalwa Steel and Power Ltd; JSW Steel Limited; and TSLP. Approval was given to TSLP, the highest bidder.
iv.The bidding process towards the enterprise value of the company, comprises the liabilities of the company and the ~93.71 percent equity of the company.
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About Tata Steel Long Products (TSLP) Limited:
Headquarters – Keonjhar, Odisha
Managing Director – Ashish Anupam
