NINL Asks 300 CR

Facing dire financial constraints, a Joint Public Sector Company, Neelachal Ispat Nigam Limited (NINL) has approached Odisha Government to extend financial support to run the plant.

The Management of NINL has approached the State Government to help out the Steel Major as it is facing serious crisis due to financial problem.

Managing Director of NINL, S S Mohanty has approached the State Government for funding of Rs.300-400 Crore to continue the operation of the Plant, which is in dire straits.

While NINL has achieved highest ever production and turn over in 2018-19 with a growth of 126 Percent over 2017-18 Financial Year, sales turnover of Rs.2100 crore was achieved in 2018-19.

Under the leadership of Mr.Mohanty, who is a highly professional and effective leader in Steel Sector, NINL has produced Steel Billets of 68,081 Ton in 2018-19, which was the highest output with 0.8 Million Ton Hot Metal.

NINL is getting ready for its Mining Operations in the Second Quarter of 2019-20.

Under this backdrop, NINL is being disinvested and MMTC, which is the major shareholder, has intimated the Stock Exchanges to disinvest MMTC’s Equity in NINL.

MMTC is facing liquidity problem and they are not in a position to extend the required amount of financial support to NINL for normal operation of the plant.

With financial stress and stressed cash flow , NINL has reduced its capacity utilization.

For last two months, NINL has reduced its operation to almost 50 Percent and it is likely to come down further as fund flow is not there.

Due to dire financial conditions, payment of loan, interest, statutory dues and even salary payment of the employees are affected, admits a senior officer in NINL.
With a rich iron ore mines in the hands of NINL and an effective leadership to run the plant, it will be prudent to keep the plant running at an optimum level, experts feel.

If the plant runs its operation, NINL value in the market will go up and proper valuation of the plant for the interest of all stake holders will be protected.
NINL is promoted by MMTC, IPICOL and other Government Agencies and now it is facing acute financial problem.
Now Government of India has also decided to disinvest MMTC’s share in NINL due their liquidity problem.
So now getting financial support from MMTC is remote and it has run into uncertainty.
However to run the show NINL needs atleast Rs.300-400 Crore and the Odisha Government, which is another stake holder can save the situation, opine experts in Steel Sector.

While there was a move to amalgam NINL with SAIL, but it never materialized and now State Government is the only saviour, feel insiders in NINL.
Under this backdrop, State Government will have to take a call as soon as possible as time is running out.

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