Centre gets bids for Neelachal Ispat, sale moves to 'concluding stage'

The central government has accepted most demands made by potential buyers for the joint venture steel company.

The central government has received bids for the sale of Neelachal Ispat Nigam Ltd (NINL), marking the "concluding stage" for the strategic disinvestment of the state-owned steel company.

The Centre seeks to divest 93.7 per cent stake held by four central public sector enterprises (CPSE) and two Odisha government companies. CPSEs MMTC and NMDC own 49.78 per cent, and 10.10 per cent in NINL, respectively while MECON and Bharat Heavy Electricals hold 0.68 per cent each. Odisha government-owned Industrial Promotion and Investment Corporation of Odisha (IPICOL) and Odisha Mining Corporation (OMC) own 12 per cent and 20.47 per cent stake in NINL, respectively.

For a successful sale of the stressed joint venture company, the central government has accepted most demands made by potential buyers.

These include lowering the lock-in period for sale of assets to one year and allowing the new buyer to undertake the amalgamation of a special purpose vehicle (SPV) into NINL. Last month, the core group of secretaries on divestment (CGD) headed by Cabinet Secretary Rajiv Gauba decided that the lock-in period for the buyer can be reduced to one year from the date of completion of sale, from the earlier three years proposed by Dipam. This would exclude land and mining leases. The lock-in restriction for the sale of land and mining leases would continue to be three years.

“...The process now moves to concluding stage,” Tuhin Kanta Pandey, Secretary in the Department of Investment and Public Asset Management, said on Twitter about bids for NINL.

The Centre has also agreed to the bidders’ demand that some members of the consortium of buyers may just be financial investors and would not have a joint liability over dues.

The receipt of financial bids may help in closing the transaction in the ongoing financial year as targeted by the government. Besides Air India, the government is aiming to privatise BEML, Shipping Corporation of India (SCI), Pawan Hans, Central Electronics, and NINL this year.