New Delhi: Tata Steel Long Products is all set to acquire Neelachal Ispat Nigam Limited (NINL) for Rs 12,100 crore.
The Cabinet Committee on Economic Affairs, approved the highest bid of Tata Steel Long Products Limited for 93.71% of shares of Joint Venture partners of 4 CPSEs and 2 Odisha Govt State PSEs at the Bid 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 30.3.2020. The company has huge debt and liabilities exceeding Rs. 6,600 crores as on 31.3.2021, 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 31.3.2021.
The Govt. 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, according to an official release.
“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”, the release stated.