Govt gives nod for NINL sale to Tata Steel for ₹12,100 cr

NINL HAS NEGATIVE NETWORTH OF ₹3,487 CRORE AND ACCUMULATED LOSSES OF ₹4,228 CRORE AS OF MARCH 31, 2021

NEW DELHI: The government on Monday said it has approved sale of loss-making Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products Ltd for ₹12,100 crore.

NINL is a joint venture of four CPSEs, namely MMTC, NMDC, BHEL, MECON and two Odisha Government PSUs, namely OMC and IPICOL. NINL has an integrated steel plant with a capacity of 1.1 million tonnes (MT), at Kalinganagar, Odisha. The company has been running in huge losses and plant is closed since March 30, 2020.

Three companies -- Consortium of Jindal Steel & Power Limited and Nalwa Steel and Power Ltd; JSW Steel Limited; and Tata Steel Long Products Limited (TSLP) -- had put in financial bids for buying NINL.

TSLP emerged as H-1 bidder, whose bid has been accepted. Letter of Intent (LoI) is being issued to TSLP inviting them to sign the share purchase agreement (SPA).

At this stage, 10% of the bid amount shall be paid by the successful bidder into the escrow account.

The government approves strategic buyer for NINL located in Odisha.

The highest bid of ₹12,100 crore by M /s Tata Steel Long Products Ltd is accepted, DIPAM Secretary Tuhin Kanta Pandey tweeted.

NINL has huge debt and liabilities exceeding ₹6,600 crore as on March 31, 2021, including huge overdues of promoters (₹4,116 crore), banks (₹1,741 crore), other creditors and employees.

The company has negative networth of ₹3,487 crore and accumulated losses of ₹4,228 crore as of March 31, 2021.

Notably, earlier this month the government handed over ownership in loss-making national carrier Air India to Tata Group for ₹18,000 crore.