Central PSU MMTC, which is a major stakeholder in the Odisha-based Neelachal Ispat Nigam limited (NINl), seems not interested in the revival of the plant. The steel plant at Kalinganagar has been starving for additional investment.
The MMTC’s attitude has forced Chief Minister Naveen Patnaik to take up the matter with the Centre.
"I request you to instruct MMTC to provide additional equity support to NINl at the earliest in the interest of the survival of NINl," Patnaik has written to Union Minister of State for Commerce and Industry Nirmala Sitharaman.
Expressing concern over the NINl’s future, an integrated steel plant jointly promoted by the MMTC and two State PSUs OMC and IPICOl, Patnaik said the joint venture needs infusion of an additional equity of Rs 300 crore to overcome its acute financial crisis.
While 49.78 per cent of the equity of the NINl is held by the MMTC, the State PSUs together hold 27.61 per cent.
Patnaik said that due to the depressed market conditions, the company has been incurring losses since 2012-13; and in order to improve its financial condition, the company has undertaken various measures such as refinancing its existing projects and loan under the refinance scheme in the
2015-16 fiscal.
While sanctioning the scheme, the bankers have stipulated as precondition that the promoters have to infuse an additional equity of Rs 300 crore. At this stage, the company needs immediate equity infusion to overcome the crisis, the Chief Minister said.
Noting that the State Government is deeply concerned about the survival and growth of the NINl, which employs about 3,700 workers, Patnaik said the State Government has already executed a lease for iron ore mining in favour of the NINl to provide it an assured supply of
raw material.
“The State Government has already accorded its approval for infusion of equity of Rs 80 crore since last two years as pro-rata share by OMC, disbursement of which is subject to infusion of equity of Rs 149.34 crore by MMTC as their share. However, MMTC is yet to bring in its share of the additional equity support,” Patnaik wrote in the letter.