The Union Government has requested the State Government to release around Rs 230 crore to the Neelachal Ispat Nigam Limited (NINL) to meet its pending dues and run the operations.
While Chief Secretary Asit Tripathy requested the Government of India to take care of the public sector steel maker from serious condition, the Union Ministry of Commerce has sent the ball to State Government's court.
Recently, Chief Secretary Tripathy looking at the precarious condition of the NINL had requested the Department of Investment and Public Asset Management (DIPAM) to complete the process of disinvestment early, so that it will fetch better prices.
DIPAM Secretary Tuhin Kanta Pandey in turn requested Secretary Commerce Anup Wadhwan to look into the issues of NINL.
Union Minister Commerce and Industry, Piyush Goyal had requested the major promoters the NMDC, the OMC and the IPICOL to contribute their proportionate funding to maintain the NINL free from Insolvency and Bankruptcy Code(IBC) proceedings, till the process of disinvestment is completed through DIPAM.
The MMTC has already released Rs 553 crore to the NINL on various accounts including working capital , supply of raw material, statutory dues and interest etc.
The MMTC, a major shareholder of NINL, has been supporting the steel maker since long and has already extended financial support of Rs 3,200 crore as on March 31.
The MMTC has taken loans to support the NINL and it has also extended Corporate Guarantee for Rs 1,345 crore to various banks and financial institutions on behalf of the NINL to secure the loans availed by the NINL, apart from equity infusion including share premium of Rs 460 crore. So in toto the MMTC has extended financial support to the NINL to the tune of nearly Rs 5,005 crore. However, now as the MMTC is facing financial crisis and non availability of resources, it is not able to release their share of balance funds to the NINL.
Under this backdrop, the OMC, IPICOL, NMDC have been requested to release their share of balance funds to the NINL, so that the PSU will tide over the acute financial crisis.
While the OMC is releasing funds for debt servicing, more is needed for salary, payment to contractors, and statutory dues, for which the NINL is facing hardship.