Indian government makes preliminary move for strategic sale of RINL

Monday, 25 January 2021 11:35:29 (GMT+3)   |   Kolkata
       

The Indian government has taken the first preliminary move towards the strategic sale of state-run steel producer Rashtriya Ispat Nigam Limited (RINL), government sources said on Monday, January 25.

While no official confirmation regarding the sale of RINL has been made by the government, the sources said that the Department of Investment and Public Asset Management (Dipam) has started preparing a roadmap and a proposal for the 100 percent strategic sale of the 7.3 million mt per year steel mill located at the southern Indian port town of Vishakhapatnam.

The sources said that RINL has been notching up losses for the past several consecutive years and the proposal for the strategic sale of the steel mill first mooted three years ago is being revived again as rising global steel prices are expected to yield good valuations for the government asset.

At behest of the government, RINL management has set up a working group with South Korean steelmaker POSCO to prepare a roadmap and plan for a joint venture project for special steel production at RINL’s existing site at Vishakhapatnam, whereby land offers for the project would be considered as the latter’s contribution toward equity for such a project.

However, the sources said much of the success in implementing the strategic sale of RINL will depend on the government’s ability to navigate the political opposition that such a disinvestment is expected to inevitably trigger among workers and political opposition parties.


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