New Delhi: Union minister Ashwini Vaishnaw on Friday said that Union cabinet on Thursday has approved Rs 11,440 crore — a ‘huge package’ of this kind — for the revival of debt-stricken and loss-making state-owned steelmaker of Rashtriya Ispat Nigam Limited (RINL). The package will involve equity infusion to the tune of 90 per cent, working capital addition and issue of preference shares that are redeemable after a 10-year-period.
Union steel minister HD Kumaraswamy had been keen on revival of the plant for a long time and he had taken up the matter with the Prime Minister’s Office (PMO) for its revival. “This would be the first time in recent years that such a massive equity infusion has been planned for an ailing CPSE, once on the verge of divestment, but now being readied for a “possible turnaround on another 18-24 months” said a ministry official on condition of anonymity.
Confirming the development, Vaishnaw also said that Prime Minister Narendra Modi approved a package of Rs 11440 crore for the revival of RINL yesterday. “As we all know that RINL has a very special position in the entire steel industry, it is one of those plants, which is located at the coast of Andhra Pradesh in Vizag. This is a very important steel company in the overall steel sector of the country. With this revival package, many of the historical legacy problems that RINL used to face will be resolved,” he said at an event here.
However, the official said that the total package involves equity infusion to the tune of 90 per cent, working capital addition and issue of preference shares that are redeemable after a 10-year-period. “Simultaneously, a lot of effort is going to be put in securing the raw material for RINL and the modernisation of the plant as well. In this overall package of Rs 11,440, fresh equity infusion of Rs 10,300 crore is there and the rest is conversion of working capital loan into preferred share capital of Rs 1,140 crore,” Vaishnaw said.
On job front, the minister also assured that with this revival, all the employees of RINL as well as all the people connected with the economic activities of RINL will be immensely benefited and Andhra Pradesh will have a major steel plant revived in the coming days. Very soon RINL will start functioning with two glass furnaces and by August it is planned to start all the three glass furnaces,” the minister added.
RINL, popularly known as Vizag Steel, has a 7.3 million tonne per annum (mtpa) liquid steel production capacity in Visakhapatnam, Andhra Pradesh. It has three blast furnaces. Of the three, two are already operational and the third one is likely to be ready post the equity infusion, around August this year. The attempt is towards a capacity utilisation of nearly 92.5 per cent over the next two year’s period.