New Delhi: The Centre has asked the Department of Investment and Public Asset Management (DIPAM) to fast-track the disinvestment of Odisha-based steel PSU Neelanchal Ispat Nigam Limited (NINL) and complete the process in the next three-four months, two separate sources, who spoke to PSU Watch on the condition of anonymity, said. The news comes as a high-level meeting took place on Thursday between Steel Minister Dharmendra Pradhan, Minister for Corporate Affairs Piyush Goyal, DIPAM Secretary Tuhin Kanta Pandey and the top executives of MMTC Limited (primary promoter of NINL) and NINL.
PSU Watch had reported earlier that NINL is facing a deep financial crunch and has not been able to pay its employees for the last six months. The Cabinet had approved the disinvestment of NINL in January this year. However, the financial crisis at NINL (which had been making losses before the government approved its disinvestment) deepened as MMTC refused to release funds to the Odisha-based PSU.
One of the two sources quoted above also told PSU Watch that the Centre has asked MMTC to sell off finished products worth around Rs 230 crore, which are with NINL, and release funds so that the latter could release the overdue and current salaries to its employees. The finished products at NINL have been a bone of contention between NINL and MMTC for the last four-five months, with the latter demanding a cut in the proceeds of the sale, while NINL was contending it.
The release of overdue and current salaries would come as a breather to employees who have been waiting for payment for the last six months. However, the decision to fast-track NINL disinvestment may not address the issue of restarting the plant at the earliest. It must be noted that by reiterating its resolve to disinvest NINL, the government has basically reasserted its intention to privatise NINL and offer management control to a private player. However, since the COVID-19 pandemic has dealt a blow to the steel industry, finding a buyer for NINL could be difficult for DIPAM. Moreover, since the NINL integrated steel plant has shut down its operations completely since March, its valuation would depreciate and selling it off on 'fast-track' mode might mean that the shareholders may end up realising lesser out of the deal than they would have if the plant and its captive mines were functional.
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.
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