Bhubaneswar: In a bid to revive the fortunes of the ailing Neelachal Ispat Nigam Limited (NINL), Odisha Chief Minister Naveen Patnaik today drew the attention of Union Commerce and Industry Minister Nirmala Sitharaman for infusion of fund into the steel mill.
In a letter to the Union Minister, the Chief Minister requested the former to provide additional equity support to NINL at the earliest in the interest of survival of the integrated steel plant, jointly promoted by MMTC Limited, a central PSU under Ministry of Commerce and Industry, and two state PSUs – OMC and IPICOL – of Odisha government.
Worth mentioning, 49.78 percent of the equity of NINL is held by MMTC Ltd whereas the two state PSUs hold 27.61 percent of its equity.
Due to depressed market conditions the company has been incurring losses since 2012-13. In order to improve its financial condition, the company has undertaken various measures – such as refinancing its existing project loan under the refinance scheme of RBI, in the financial year 2015-16, Naveen said.
While sanctioning the scheme, bankers have stipulated a precondition that the promoters have to infuse additional equity of Rs 300 crore. At this stage, the company needs immediate equity infusion to overcome the acute financial crisis, he stressed.
The state government is deeply concerned about the survival and growth of NINL, which employs about 3700 workers. On its part, the state government has executed a mining lease for iron ore mine in favour of NINL in order to provide assured supply of iron ore, he added.
The government of Odisha has already accorded its approval for infusion of equity of Rs 80 crore since last two years as pro-rata share by OMC, the disbursement of which is subject to the infusion of equity of Rs 149.34 crore by MMTC Ltd. as their share. However, the MMTC is yet to bring in its share of the additional equity support, he concluded.