CCEA gives in-principle nod to demerger, strategic disinvestment of NSP

After the demerger, NSP will become a separate company and the managements of NMDC and NSP will be accountable for their respective operations and financial performance

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave “in-principle” approval to the demerger of Chhattisgarh-based Nagarnar Steel Plant (NSP) from National Minerals Development Corporation (NMDC), and strategic disinvestment of the demerged company by selling the entire government stake to a strategic buyer.
 
The processes of demerger and disinvestment would be initiated together and disinvestment of the demerged company (NSP) is expected to be completed by September 2021.
 
With its approval, the CCEA amended an earlier decision taken in October 2016 to disinvest NSP as a unit of NMDC.
 
 After the meeting, Information and Broadcasting Minister Prakash Javadekar said the proposal to demerge NSP into a separate company before its disinvestment will allow NMDC to focus on its core activities of mining.
 
Shareholders of NMDC will also be shareholders of the demerged company (NSP) in the proportion of their shareholding, Javdekar said.  After the demerger, investors will have better visibility of the operations and cash flow of NMDC and NSP, he said. The demerger will also be tax neutral from the point of view of capital gains.  NSP is a 3-million tonne per annum (mtpa) integrated steel plant, being set up by NMDC in Chhattisgarh’s Nagarnar at a revised estimated cost of Rs 23,140 crore.  NMDC, so far, has invested Rs 17,186 crore in the project, of which Rs 16,662 crore is from NMDC’s own funds; Rs 524 crore has been raised from the bond markets. NMDC’s stock closed 0.95 per cent up at Rs 79.95 on the BSE on Wednesday.

OTHER CABINET DECISIONS
 
The Cabinet allowed Abu Dhabi National Oil to export oil from a Mangaluru strategic storage, a government minister said, mark­ing a policy shift that could enhance foreign participation as India seeks to expand its storage capacity. India has formerly barred oil exports from strategic storage.
 
The Cabinet chaired by PM Modi approved a special package of Rs 520 crore for J&K and Ladakh under the National Rural Livelihood Mission (NRLM). NRLM aims to enable the rural poor to increase household income through sustainable livelihood enhancements and improved access to financial services. 
 
The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the Strengthening Teaching-Learning and Results for States project under the New Education Policy to support states in strengthening the school education system, Union Minister Prakash Javadekar said.

(Agencies)