Extension On Iisco Deadline To Be Sought

The Steel Authority of India will seek a three month extension of the deadline imposed by the Board for Industrial and Financial Rehabilitation (BIFR) for finalising a revival package for its ailing subsidiary, the Indian Iron and Steel Company at the next BIFR hearing scheduled for February 26..

Since the finance ministry is yet to decide on the utilisation of the escrow account for capital investement in projects, SAIL is not in a position to finalise a revival package for IISCO with the Russian trading firm Tyazhpromexport (TPE).

The steel ministry had earlier referred the matter to the finance ministry since Tyazhprom-export, the Russian trading house keen to partner SAIL in the modernisation of IISCO, proposes to route part of its capital investment in the ailing unit through the rupee-rouble account.

 

The finance ministry has informed the ministry of steel that utilisation of the Re-Rouble account for capital investment in projects will require a separate agreement between the Russian and the Indian government.

The steel major has also proposed a divestment of 20 per cent of 85.8 per cent government equity holding in SAIL. This is likely to raise nearly Rs 1 billion, SAIL chairman Arvind Pande said.

As per the recent proposal of the divestment Commission the proceeds from divestment could be earmarked under a separate fund to rehabilitate the sick Burnpur-based unit, he added.

TPE has suggested that it be allowed to route at least 10 per cent of the funds (or roughly Rs 300 crore) through the Rupee-rouble account.

The remaining funds would be invested through the supply of machinery.

TPE is however yet to work out the details of the proposal.

The Re-rouble debt repayment method was earlier agreed upon bilaterally for trade purposes and has not been utilised for capital investment in projects.