The Centre has received multiple financial bids to acquire 100% stake in Odisha-based Neelachal Ispat Nigam (NINL), jointly owned by four central PSUs and two Odisha government PSUs.
“Financial bids received for strategic disinvestment of Neelachal Ispat Nigam Limited. Process now moves to concluding stage,” Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey tweeted on Thursday.
Equity shareholding of NINL consists of Minerals & Metals Trading Corporation (49.78%), National Mineral Development Corporation (10.10%), MECON (0.68%), Bharat Heavy Electricals (0.68%), Industrial Promotion and Investment Corporation of Odisha (12%) and Odisha Mining Corporation (20.47%).
Due to continuous losses, production in NINL has been halted and employees have not received salaries for over a year now. NINL has posted a loss of Rs 402 crore in FY19 and Rs 827 crore in the first nine months of FY20.
Pending dues of employees will be covered by the waterfall arrangements. That means any receipts from the sale will be deposited in an escrow account to be used to pay the salary dues of the employees of the company.
The land bank may be of interest to new investors since it may provide a ready expansion opportunity. Total land area leased to NINL at the existing facility is around 2,500 acres. The plant facilities are located at strategic location at Kalinganagar Complex, Odisha with proximity to iron ore and other raw materials. It also has been allotted captive iron ore mine in Sundargarh and Keonjhar district of Odisha.
The Centre is hopeful that the successful strategic buyer may bring in new management/technology/investment for the growth of the company and might use innovative methods for the development of the business operations of the company, which might generate more employment opportunities.