The government has informed potential private bidders for the ailing steel company Neelachal Ispat Nigam Limited (NINL) that lenders and other entities holding 6.29% stake in the company will neither infect any fund in the firm as part of the privatization process. Nor will they load their shares.
The Department of Investment and Public Asset Management (DIPAM) in the Ministry of Finance has also told bidders that no shareholder agreement for the partially paid up shares of 0.94% held by the firm’s previous vendors – GA Daniels India Ltd and SMS India Pvt. is. Ltd. – from 1999-2000. It also stated that these shares would not be sold, in response to a question from bidders as to whether these holdings could be bought or canceled.
The Government has invited expressions of interest to offload 93.71% stake in NINL held by Odisha, Odisha Mining Corporation, NMDC, MECON and BHEL’s Industrial Promotion and Investment Corporation, MMTC by 29 March. NINL has been established in 1982. Has been in deficit since 2012-13.
As per the latest annual report for 2019-20 with bidders this week, the firm’s losses posted a record ₹ 1,758 crore turnover in the year from ₹ 401.45 crore in the year 2018-19. As per preliminary information provided to the bidders in January, the firm incurred a loss of ₹ 826.73 crore in the first nine months of 2019-20.
The bidders have asked the government about plans for a 5.35% residual stake by 11 state-owned financial institutions, mainly including LIC, IDBI Bank and Central Bank of India – as part of the corporate debt restructuring exercise in 2004-05 Two holders of shares – and another partially paid share – hold 0.94%.
The liabilities of the loss-making firm will be cleared from the disinvestment proceeds and these minority shareholders will be provided undue profits without any capital gains. The bidders have mentioned that presumably, the remaining 6.29% of the shares should also fall under the division or they should misuse the capital proportionately because their role in the process (as a post-process shareholder) is similar to that of the interest bidder. is.
He said, “The shares are not part of the current disinvestment process and will continue to be held after the shareholders’ disinvestment. No infringement of capital from the remaining 6.29% shareholders has been done to settle the liabilities of NINL, ”the government said.
Incidentally, NINL has submitted a new debt restructuring plan for banks in December 2020, which includes a request for a fresh fund of up to 350 crores to start operations of its plant and mines. “The same is under consideration by the lenders,” DIPAM has conveyed to bidders. An NOC has also been sought from lenders for the disinvestment process.
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