Neelachal Ispat Nigam, partly owned by Odisha govt, to be privatised

Interested bidders can submit their expression of interest by March 29.
The government has invited bids to privatise Neelachal Ispat Nigam Ltd. (NINL), seeking to divest 93.7 per cent stake held by four central public sector enterprises and two Odisha government-owned companies.

The Cabinet Committee on Economic Affairs had in January 2020 given in-principle approval for strategic disinvestment of equity shareholding of MMTC, NMDC, MECON, Bharat Heavy Electricals, Industrial Promotion and Investment Corporation of Odisha (IPICOL) and Odisha Mining Corporation (OMC) in Neelachal Ispat Nigam to a strategic buyer. MMTC owns 49.78 per cent, and NMDC owns 10.10 per cent in NINL, while MECON and BHEL hold 0.68 per cent each. IPICOL and OMC own 12 per cent and 20.47 per cent, respectively. The remaining stake is held by government-owned banks and insurance companies.

The divestment receipts would go to state-owned companies, and not to the government.

Interested bidders can submit their expression of interest by March 29. NINL was incorporated in 1982 to set-up an integrated steel plant to undertake manufacturing and sale of steel products. NINL has a 1.1 million tonne per annum steel manufacturing unit which produces pig iron and billets. The company reported net sales of 801 crore in Arpil-Dec 2019, and a loss of 826 crore.

The interested bidders should have a minimum net worth of Rs 2,000 crore. Any entity permitted to invest in India can submit an EOI either independently or as a consortium member. Government-owned companies are not eligible to participate in the transaction. Employees can participate in the bidding process through a consortium considering the net worth criteria is met.

Through the strategic disinvestment, management and control of NINL will be transferred to a new buyer that will include purchase of shares and infusion of funds into NINL that will be used to repay existing debt of the company. Debt repayment will be detailed in the Request For Proposal stage.

Once shortlisted based on criteria, the bidders would be quote on an enterprise value of NINL. The amount payable by successful bidder would be used for settlement of labour dues, operational creditors, commercial lender debt, promoter debt and purchase of 93.71% of shareholding of NINL through a predetermined waterfall mechanism. 


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel