Odisha Chief Minister Naveen Patnaik on Tuesday requested Commerce and Industry Minister Nirmala Sitharaman to instruct MMTC to provide additional equity support for survival of Neelachal Ispat Nigam Ltd (NINL).
"The Government of Odisha has already accorded its approval for infusion of equity of Rs 80 crore since last two years as pro-rata share by OMC, the disbursement of which is subject to the infusion of equity of Rs 149.34 crore by MMTC Limited as their share.
However, the MMTC is yet to bring in its share of the additional equity support," said the Chief Minister in a letter to Sitharaman.
While 49.78 per cent of the equity of NINL is held by MMTC Ltd, the state PSUs together hold 27.61 per cent.
Due to depressed market conditions, the company has been incurring losses since 2012-13.
"In order to improve its financial condition, the company has undertaken various measures such as refinancing its existing project loan under the refinance scheme of RBI in the financial year 2015-16," said Patnaik.
While sanctioning the scheme, bankers have stipulated a precondition that the promoters have to infuse additional equity of Rs 300 crore. At this stage, the company needs immediate equity infusion to overcome the acute financial crisis, he said.
Patnaik said the state government is deeply concerned about the survival and growth of NINL, which employs about 3700 workers.
"On its part, the state government has executed a mining lease for iron ore mine in favour of NINL in order to provide assured supply of iron ore," he said.
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