The government on Monday said it has approved sale of loss-making Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products Ltd for Rs 12,100 crore.
NINL is a joint venture of four CPSEs, namely 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 million tonnes (MT), at Kalinganagar, Odisha. The company has been running in huge losses and plant is closed since March 30, 2020.
Three companies -- Consortium of Jindal Steel & Power Limited and Nalwa Steel and Power Ltd; JSW Steel Limited; and Tata Steel Long Products Limited (TSLP) -- had put in financial bids for buying NINL.
TSLP emerged as H-1 bidder, whose bid has been accepted. Letter of Intent (LoI) is being issued to TSLP inviting them to sign the share purchase agreement (SPA). At this stage, 10 per cent of the bid amount shall be paid by the successful bidder into the escrow account.
The government approves strategic buyer for NINL located in Odisha. The highest bid of Rs 12,100 crore by M /s Tata Steel Long Products Ltd is accepted, DIPAM Secretary Tuhin Kanta Pandey tweeted.
NINL has huge debt and liabilities exceeding Rs 6,600 crore as on March 31, 2021, including huge overdues of promoters (Rs 4,116 crore), banks (Rs 1,741 crore), other creditors and employees.
The company has negative networth of Rs 3,487 crore and accumulated losses of Rs 4,228 crore as of March 31, 2021.
Notably, earlier this month the government handed over ownership in loss-making national carrier Air India to Tata Group for Rs 18,000 crore.
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