State writes to Centre for equity support to NINL

17 July 2017

The State Government on Tuesday asked the Centre to instruct the Metals and Minerals Trading Corporation of India (MMTC) to provide equity support to the loss-making Neelachal Ispat Nigam Limited (NINL) at the earliest for survival of the company.

Chief Minister Naveen Patnaik expressed concern over the future of NINL, an integrated steel plant jointly promoted by MMTC and two State public sector undertakings (PSUs) – Odisha Mining Corporation (OMC) and Industrial Promotion and Investment Corporation of Odisha (IPICOL).

While 49.78 per cent of equity of NINL is held by MMTC, the State PSUs together hold 27.61 per cent of its shares. “Due to depressed market conditions, the company has been incurring losses since 2012-13,” the Chief Minister stated in a letter to Nirmala Sitharaman, Union Minister of State for Commerce and Industry.  The Chief Minister said, the company has undertaken various measures including refinancing its existing project loan under refinance scheme of the Reserve Bank of India (RBI) in 2015-16. While sanctioning the scheme, bankers stipulated a precondition that the promoters have to infuse additional equity of 300 crore, Naveen said and added at this stage the company needs immediate equity infusion to overcome the acute financial crisis.

Stating that Odisha Government is concerned about the survival and growth of NINL, which employs about 3,700 workers, Naveen said it has also executed an iron ore mine in favour of the company to provide assured supply of iron ore.

The Chief Minister said, though the State Government has already accorded infusion of equity of `80 crore since the last two years as pro-rate share by OMC, the disbursement of which is subject to provision of 149.34 crore equity by MMTC as their share, the latter is yet to provide the equity support.

“In the above context, I would request you to kindly use your good offices to instruct MMTC to provide the additional equity support to NINL at the earliest for the survival of NINL,” he said.

Source-indianexpress