Cabinet approves strategic sale of Neelachal Ispat

As big disinvestment proposals are put on hold due to poor markets conditions, the Union Cabinet Wednesday approved an in-principle strategic disinvestment of equity shareholding in five small PSUs - Neelachal Ispat Nigam Ltd, Minerals and Metals Trading Corporation Ltd, National Mineral Development Corp, MECON and BHEL.

NINL is a joint venture company, in which four central PSUs -- MMTC, National Mineral Development Corporation (NMDC), Bharat Heavy Electricals Ltd (BHEL) and MECON -- and two Odisha government companies IPICOL and Odisha Mining Corporation (OMC) are shareholders.

MMTC holds 49.78% share in NINL, followed by OMC, 20.47%, IPICOL, 12%, NMDC 10.10%, while MECON and BHEL hold 0.68% each.

The strategic buyer for NINL will be identified through a two-stage auction procedure, an official statement said after the Cabinet meeting chaired by Prime Minister Narendra Modi.

"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 said.

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, it said.

The government is all set to miss a lofty disinvestment target of Rs 1.05 lakh crore this year, with the share sale in public sector companies touching only about Rs 18,000 crore.

Two big disinvestments of Air India and BSNL have been put on hold for next year. While the former has not attracted any bidder even during the road shows in Singapore and London, the later has met with a lot of opposition, even within the BJP.