DIPAM Issues Clarifications for NINL Sale on 29 March
Indian government has changed rules to allow sole bidders of Neelachal Ispat Nigam Ltd to form a consortium and existing consortium to induct or exclude new members. Department of Investment and Public Asset Management said that “The interested bidders can apply to seek approval for the change to the transaction adviser within 60 days. The divestment is based on enterprise value of the company, and the proceeds would be used to repay the company's lenders.”
Department of Investment and Public Asset Management has also informed potential bidders that lenders and other entities holding a 6.29% stake in the company will neither infuse any funds nor offload their shares in the firm as part of the privatisation process. It said “These shares are not a part of the current disinvestment process and would continue to be shareholders post disinvestment. No infusion of capital from the remaining 6.29% of shareholders is envisaged to settle the liabilities of NINL.”
Indian government seeks to divest 93.7% stake in the company held by h MMTC, the Industrial Promotion & Investment Corporation of Odisha, Odisha Mining Corporation, NMDC, MECON and BHEL. 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. As per the latest annual report for 2019-20, NINL’s losses hit a record INR 1,758 crore in the year from INR 401.45 crore in 2018-19. Set up in 1982, NINL has been incurring losses since 2012-13.