New Delhi: The government is set to float a request seeking EoIs (Expressions of Interest) from potential bidders for the strategic disinvestment of state-run NINL (Neelanchal Ispat Nigam Limited) soon, DIPAM (Department of Investment and Public Asset Management) Secretary Tuhin Kanta Pandey told PSU Watch on Wednesday. He, however, added that the progress of the disinvestment process will depend on how the "economic scene evolves in the backdrop of the COVID-19 situation."
The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi had given 'in principle' approval for the strategic disinvestment of Odisha-based state-run joint venture company NINL in January this year. The company is in a dire financial state and has not been able to pay salaries to its regular employees since February. With the main promoter MMTC refusing to infuse any more funds into the loss-making integrated steel plant, the only route for the company's revival is disinvestment.
A source, who spoke to PSU Watch on the condition of anonymity, said that the government is very much firm on its decision to privatise NINL, in line with the announcement made earlier this year.
This assumes significance because it is difficult to predict how long will the disinvestment process take, keeping in view the COVID situation and the interest shown by investors. Since NINL has shut down operations since March, its asset valuation may depreciate if it continues to remain shutdown, and the employees will have to wait longer to draw salaries.
NINL has been piling losses for a long time. The Centre has been considering the revival of the loss-making plant through merger or disinvestment for quite some time and a Cabinet nod was given to the NINL disinvestment plan in January this year. However, at a meeting in September 2019, the government had asked NINL's shareholders to infuse capital proportionate to their stakes to keep the company running until its disinvestment.
NINL has a complex shareholding pattern with MMTC holding 49.78 percent share and the Odisha government at 32.47 percent. The rest of the shares are held by NMDC Ltd, IDBI Bank, MECON, BHEL and Odisha PSUs IPICOL and OMC. Employee unions and executive associations at NINL have claimed that the Odisha state government, OMC and IPICOL have already infused capital proportionate to their shareholdings, but it is MMTC which is not releasing funds required to meet the working capital expenditure of NINL.
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