Sale of NINL to Tata Steel Long Products
The government recently approved the sale of loss-making Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products Ltd.
- NINL will be sold to Tata Steel for Rs 12,100 crore.
- This is first case of privatisation of a public sector steel manufacturing enterprise in country.
About Neelachal Ispat Nigam Ltd (NINL)
NINL is a joint venture of four CPSEs, viz., MMTC, BHEL, NMDC and MECON as well as two PSUs of Odisha Government, OMC and IPICOL. It has an integrated steel plant at Kalinganagar in Odisha, with a capacity of 1.1 million tonnes (MT). however, it has been running in huge losses and is closed since March 30, 2020.
Huge debt with NINL
NINL has been running into huge debt and liabilities of more than Rs 6,600 crore as on March 31, 2021. It also includes huge overdues of promoters (Rs 4,116 crore), banks (Rs 1,741 crore), employees and other creditors. The company has negative net worth of Rs 3,487 crore while accumulated losses of Rs 4,228 as on March 2021.
Bids to buy NINL
Three companies, Consortium of Jindal Steel & Power Limited and Nalwa Steel and Power Ltd; Tata Steel Long Products Limited (TSLP) and JSW Steel Limited had put in financial bids to buy NINL. TSLP emerged as H1 bidder and its bid was accepted. Letter of Intent (LoI) will be issued to invite TSLP to sign the share purchase agreement (SPA). At this stage, TSLP will require to pay 10 per cent of the bid amount. Tata made a bid of Rs 12,100 crore.
Tata Steel Long Products Ltd
Tata Steel Long Products is one among largest specialty steel plants in India. It has an annual capacity of One Million Tons. It is actively involved in creating opportunities for employability, livelihood, skill development, and education in plant and mines operation.
Category: Economy & Banking Current Affairs - 2024