New Delhi: A week after inviting bids for the strategic sale of Neelachal Ispat Nigam Ltd (NINL), the Central government has approved NINL's sale to the highest bidder, Tata Steel Long Products Ltd, for Rs 12,100 crore.
The Cabinet Committee on Economic Affairs has approved the sale. NINL is a joint venture of four Central Public Sector Enterprises (CPSE), -- MMTC, NMDC, BHEL, MECON, and two Odisha government PSUs, namely OMC and IPICOL. NINL has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha.
The company has running in huge loss and the plant has been closed since March 2020 with debt exceeding Rs 6,600 crores by the last fiscal year.
"This is the first instance of privatization of a public sector steel manufacturing enterprise in India. The success of the transaction is a win-win situation for all. The biggest advantage of privatization will be to the local economy of the region as the strategic buyer will be able to revive a closed plant, bring in modern technology, best managerial practices and make infusion of fresh capital, which will help in augmenting the capacity of the plant," read an official handout by the government.
The transaction, it said, was made through an open-market, competitive bidding process towards the enterprise value of the company, comprising the liabilities of the company as March 31, 2021 and the 93.71% equity of the company held by the six 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 handout read.
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