 "Steel ministry knocks on finance ministry's door for RINL support")
The Ministry of Steel is seeking support from the finance ministry for Rashtriya Ispat Nigam Ltd (RINL) to help the beleaguered company continue as a going concern, a top official said on Saturday.
Steel Secretary Nagendra Nath Sinha did not elaborate on the details of the ‘help’ but said there were multiple elements.
“We are in the process of requesting the finance ministry for help in certain areas so that RINL is able to continue as a going concern. Some discussions have already taken place,” he said.
He was speaking on the sidelines of an event on the Indian Steel Industry organised by the Bharat Chamber of Commerce.
Earlier this month, India Ratings downgraded RINL’s bank facilities from ‘BB+’ to ‘D’ on delay in the servicing of principal and interest repayment of term loans by June 30, 2024. The instruments with a ‘D’ rating are in default or are expected to default soon.
The rating action reflected the public sector company’s delay in debt servicing of its term loans of Rs 410.5 crore due by June 30, 2024.
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The steel secretary said that it was of “paramount importance” that RINL remained a “going concern”.
“Once the steel plant stops operation, several of the units lose value such as the coke oven, blast furnace, and steel melt shop. It takes time and a lot of money to revive them,” he said.
RINL recorded a turnover of Rs 15,643 crore (provisional) from April 2022 to December 2022 and a net loss of Rs 2,751.34 crore, according to data from the Ministry of Steel’s Annual Report 2022-23.
Sinha said the steel minister had also met the finance minister to discuss this issue. Steel and heavy industries minister H D Kumaraswamy also visited RINL earlier in July and assured all possible assistance.
On the disinvestment of RINL, Sinha said, it was a public policy of the government, adding that there were different points of view.
In January 2021, the Cabinet Committee on Economic Affairs (CCEA) gave an “in-principle” approval for a 100 per cent disinvestment in RINL through strategic disinvestment by way of privatisation.