Saddled with a dire financial crisis, the Kalinganagar-based Neelachal Ispat Nigam Limited (NINL) has approached the Odisha Government to extend it support to run the plant.
NINL Managing Director SS Mohanty has urged the State Government, one of the stakeholders of the company for a funding of Rs 300 crore to Rs 400 crore to continue the plant’s operation.
The NINL, a joint public-sector company, has achieved its highest-ever production and turnover in 2018-19 with a growth of 126 per cent over 2017-18. A sales turnover of Rs 2,100 crore was achieved in 2018-19. The company produced steel billets of 68,081 tonnes in 2018-19, the highest output with 0.8 million tonnes of hot metal. Besides, the NINL is getting ready for its mining operations in the second quarter of 2019-20.
In such a scenario, the NINL is being disinvested; and the MMTC, which is its major shareholder, has intimated the Stock Exchanges to disinvest its (MMTC’s) equity in the NINL. This is because the MMTC itself is facing liquidity problem and is not in a position to extend the required financial support to the NINL for the plant’s normal operations.
Now, because of financial stress and stressed cash flow, the NINL has reduced its capacity utilisation. For last two months, it has slashed its operation to almost 50 per cent, which is likely to come down further in the absence of fund flow. Moreover, repayment of loan, interest, statutory dues and even salary payment of the employees are affected, according to NINL sources.
However, experts feel that 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. If the plant runs its operation, the company’s market value will go up and proper valuation of the plant in the interest of all stakeholders will be protected.
Notably, the NINL is promoted by the MMTC, the IPICOL and some other Government agencies. There was a move to amalgamate the NINL with the SAIL, but it did not materialise. It now seems that the State Government is the only saviour of the NINL.