The ministry of steel is seeking a helping hand from the finance ministry for the beleaguered Rashtriya Ispat Nigam Ltd (RINL).
RINL is under the ministry of steel. “We are in the process of requesting the finance ministry for help in certain areas so that RINL is able to continue as a going concern,” steel secretary Nagendra Nath Sinha said on Saturday.
“Some discussions have already taken place,” he added. He was speaking on the sidelines of an event on the Indian steel industry organised by the Bharat Chamber of Commerce.
Sinha did not elaborate on the specifics of the ‘help’ but said that there were multiple elements.
Earlier in the month, India Ratings downgraded the rating assigned to RINL’s bank facilities from ‘BB+’ to ‘D’ on delay in the servicing of principal and interest repayment of term loans to June 30, 2024. The instruments with a ‘D’ rating are in default or are expected to be in default soon.
The rating action reflected the public sector company’s delay in debt servicing of its term loans of Rs 410.5 crore that was due up to June 30, 2024.
The steel secretary said that it was of ‘paramount importance’ that RINL remained a ‘going concern’.
“Once the steel plant stops operation, several of the units lose value such as coke oven, blast furnace, steel melt shop. And it takes time and a lot of money to revive them,” he explained.
RINL recorded a turnover of Rs 15,643 crore (provisional) during the period April 2022 to December 2022 and a net loss of Rs 2,751.34 crore, according to figures from the Ministry of Steel Annual Report 2022-23.
Sinha said that the steel minister had also met the finance minister on the issue. Steel and heavy industries minister H D Kumaraswamy also visited RINL earlier in July and assured all possible assistance.
On disinvestment of RINL, Sinha said, it was a public policy of the government, adding that there were different points of view.
In January 2021, the Cabinet Committee on Economic Affairs (CCEA) had given an “in-principle” approval for 100 per cent disinvestment in RINL through strategic disinvestment by way of privatisation.
First Published: Jul 27 2024 | 6:20 P.M IS