New Delhi, March 10: Moving towards closing stage for privatization of the Neelachal Ispat Nigam Ltd. (NINL), the JV partners of NINL have signed a share purchase agreement (SPA) with Tata Steel Long Products.
“SPA signed today by JV partners of NINL with Tata Steel Long Products. The disinvestment transaction now moves to the closing stage,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said in a tweet on Thursday.
Tata Steel Long Products emerged as the highest bidder with Rs 12,100 crore for the acquisition of the 93.71 per cent equity stake of NINL.
NINL is a joint venture of 4 CPSEs, namely MMTC, NMDC, BHEL, MECON and two Odisha Government PSUs, namely OMC and IPICOL. The State Government companies OMC & IPICOL having a total stake of 32.47% were also part of the decision-making at every stage.
NINL has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha. The company has been running in huge losses and the plant has been closed since March 30, 2020.
The company has huge debt and liabilities exceeding Rs 6,600 crores as on 31.3.2021, including huge overdues of promoters (Rs 4,116 crore), Banks (Rs 1,741 crore), other creditors and employees. The company has negative net worth of Rs. 3,487 crore and accumulated losses of Rs. 4,228 crore as of 31.3.2021.
For privatization of the NINL, Expressions of Interest (EoI) were invited on January 25, 2021. Multiple EoIs were received by the due date of March 29, 2021. In response, three bids were received by the due date.
Thereafter, the financial bids were opened for the three qualified bidders, M/s Jindal Steel & Power Limited and Nalwa Steel and Power Ltd, M/s JSW Steel Limited and TSLP.
Among the three players, TSLP emerged as H-1 bidder, whose bid has been accepted by the AM. Letter of Intent (LoI) is being issued to TSLP inviting them to sign the SPA. At this stage, 10% of the bid amount shall be paid by the successful bidder into the Escrow account.
On the closure date, shares will be transferred to the strategic buyer and the balance amount will be received to be utilized in the manner prescribed in the waterfall agreement October 27, 2021 signed amongst the selling shareholders.