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NEW DELHI: The Union Cabinet has approved a Rs 11,440 crore revival plan for debt-laden
Rashtriya Ispat Nigam
(RINL), according to a statement released on Friday.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the revival plan for RINL for Rs 11,440 crore, it added.
The infusion includes Rs 10,300 crore as equity capital into RINL and conversion of Rs 1,140 crore
working capital loan
as 7% non-cumulative preference share capital redeemable after 10 years to keep RINL as a going concern, the official statement said.
With this revival package, many of the legacy problems that RINL used to face will be resolved, information and broadcasting minister Ashwini Vaishnaw said.
The equity infusion of Rs 10,300 crore into RINL will help it overcome the operational problems related to raising working capital and start blast furnace operations in the most productive way, the statement said.
The revival package would allow the company to gradually reach its full production capacity, which is critical and is in the national interest to have stability in the
Indian steel market
by augmenting steel production and also save the livelihoods of employees (regular and contractual) and those dependent on the operations of the steel plant.
The revival plan envisages that RINI will start full production with two blast furnaces in Jan 2025 and with three blast furnaces by Aug 2025. Under the ministry of steel, RINL operates the
Visakhapatnam Steel Plant
(VSP), the only offshore steel plant in Andhra Pradesh.
It has an installed capacity of 7.3 Mtpa of liquid steel. As per the statement, the financial condition of RINL is critical. RINL has exhausted the sanctioned borrowing limits from banks for working capital and was not in a position to get further loans from banks. RINL also defaulted on the capex loan repayments and interest payments in June 2024. agencies
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