Sail Offered Karnataka Stake In Steel Unit For Re 1

The Karnataka government has offered to divest its stake in Visvesvaraya Iron and Steel (VISL) in favour of Steel Authority of India Ltd (SAIL) for Re 1.

The state government holds 34 per cent of the equity worth about Rs 67.76 crore. The Bhadravati-based unit has accumulated losses of more than Rs 66.30 crore.

Steel Authority of India which owns 66 per cent of VISL is at present working out the details of the proposed merger of the unit with the parent company following the decision of the Karnataka government to divest its stake.

After the details are worked out, it will be submitted to the steel ministry for approval.

 

SAIL has asked the Karnataka government for some concessions including a rebate in power tariff.

The equity base of VISL was raised from Rs 150 crore to Rs 200 crore, leading to a reduction in the state government stake to 34 per cent.

Subsequently, the Steel Authority of India Ltds stake went up to 66 per cent.

The unit has been affected by an acute shortage in power supply as well as high power costs which has forced it to restrict the operation of its electric arc furnace unit.

The Visvesvaraya unit has an installed capacity of 77,000 tonnes of alloy and special steels, 48,000 tonnes of mild steel, 23,800 tonnes of ferro alloys and 1,80,000 tonnes of pig iron.