RINL employee unions to go on strike against divestment

Employee unions of Rashtriya Ispat Nigam Limited (RINL) , the corporate entity of Visakhapatnam Steel Plant, have decided to go on a two-day strike on Oct 12-13 to protest against the government’s decision on diluting 10 per cent stake in the company. The unions, including Visakha Steel Employees Union (recognised union), had observed a day-long strike on July 24 against the move.

“This time, we will totally shutdown the operations. We will stop the plant for two days. It will take at least 10 days to get back to normal production and the company would lose more than Rs 100 crore,” D Adinarayana, general secretary, Visakha Steel Employees Union, told Business Standard.

While the union leaders on Monday left for Delhi to meet the steel minister, the district unit of CPI (M) conducted ‘Chalo Collectorate’ to protest against the IPO.

Stating that once they agree for divestment, he said the government would totally privatise the plant in a phased manner. “Bankers have undervalued the plant at Rs 25,000 crore when actually VSP has 26,000 acres of land and this itself is valued at Rs 26,000 crore. The bankers have calculated this at Rs 15,000 per acre,” he added.

Stating that at the current market price a greenfield steel plant needs Rs 6,000 crore per one million tonne capacity, he said VSP had over 6 million tonne capacity. Hence, the plant value was more than Rs 36,000 crore. Besides, this was the not right time to go public when the market conditions were volatile, he said.

A senior company official, however, said the allegations made by unions were not correct. The price/value, etc would be decided by an Empowered Group of Ministers after taking into consideration various inputs such market conditions from several agencies including bankers and then they would arrive at a value, he said.

The management has advised the employees to open demat accounts to buy shares, but the unions have rejected the offer.

Meanwhile, the government has decided to conduct a second round of overseas road show on the proposed IPO at three places in the US. Earlier, it had conducted road shows in London, Singapore and Hong Kong.