Odisha Chief Minister Naveen Patnaik today urged the Centre to ask MMTC for an additional equity support to NINL for survival of the loss making joint venture undertaking in Kalinga Nagar industrial hub.
"I request you to... Instruct MMTC to provide additional equity support to NINL at the earliest in the interest of the survival of NINL," Patnaik wrote to Union Minister of State for Commerce and Industry Nirmala Sitharaman.
Expressing concern over the future of Neelachal Ispat Nigam Limited (NINL), an integrated steel plant jointly promoted by MMTC (a central PSU) and two state PSUs (OMC and IPICOL), Patnaik said the joint venture need infusion of an additional equity of Rs 300 crore to overcome the acute financial crisis.
While 49.78 per cent of the equity of NINL is held by MMTC, the state PSUs together hold 27.61 per cent of its equity.
Patnaik said due to depressed market conditions, the company has been incurring losses since 2012-13 and in order to improve its financial condition, the company has undertaken various measures such as refinancing its existing projects and loan under the refinance scheme the 2015-16 fiscal.
While sanctioning the scheme, the bankers have stipulated as precondition that the promoters have to infuse an additional equity of Rs 300 crore.
At this stage, the company needs immediate equity infusion to overcome the crisis, the chief minister said.
Noting that the state government is deeply concerned about the survival and growth of NINL, which employs about 3,700 workers, Patnaik said the state has already executed a lease for iron ore mining in favour of NINL to provide assured supply of raw material.
"The state government has already accorded its approval for infusion of equity of Rs 80 crore since last two years as pro-rata share by OMC, disbursement of which is subject to infusion of equity of Rs 149.34 crore by MMTC as their share. However, MMTC is yet to bring in its share of the additional equity support," Patnaik wrote in the letter.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)