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Cabinet gives nod to strategic disinvestment of NINL

The Cabinet Committee on Economic Affairs has given ‘in principle’ approval for the strategic disinvestment of NINL
New Delhi: The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has given ‘in principle’ approval for the strategic disinvestment of Odisha-based state-run joint venture company NINL (Neelachal Ispat Nigam Limited) on Wednesday. NINL is a Joint Venture company, in which four CPSEs namely MMTC, NMDC, BHEL and MECON and 2 State PSUs of Odisha Government, namely IPICOL and OMC are shareholders.

NINL strategic disinvestment will be a 2-stage auction process

“The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has given ‘in principle’ approval for the strategic disinvestment of equity shareholding a number of PSUs. The list includes MMTC, NMDC (10.10 percent), MECON (0.68 percent) and Bharat Heavy Electricals Ltd (BHEL) (0.68 percent) and two Odisha state government PSUs namely; Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL) (12.00 percent) and Odisha Mining Corporation (OMC) (20.47 percent) in Neelachal Ispat Nigam Limited (NINL) to a strategic buyer, identified through a two-stage auction procedure,” an official press release said.

Govt says NINL sale will unlock resources for larger good

“The proposed strategic disinvestment of NINL would unlock resources to be used to finance the social sector/developmental programmes of the government benefiting the public. It is also expected that the successful strategic buyer may bring in new management/ technology/ investment for the growth of the company and may use innovative methods for the development of the business operations of the company, which may generate more employment opportunities,” the release said.

The backdrop

The government had started the process to divest NINL in December 2019. In a notification posted on the DIPAM website in the month, the government had said that it was looking to engage an advisor, asset valuer and a legal advisor for the “strategic disinvestment of 100 percent shareholding of CPSEs in a public sector joint venture company engaged in manufacturing of steel.” The DIPAM notification makes no reference to the NINL or any other state-owned steel manufacturing JV. The Centre has been considering the revival of the loss-making plant through merger or disinvestment for quite some time now. In June 2019, the Odisha state government had expressed its willingness to shed its minority stake in the joint venture.