The Indian government will not merge the financially beleaguered state-owned steel producer Rashtriya Ispat Nigam Limited with Steel Authority of India Limited (SAIL), junior minister of steel, B Srinivas, said in a statement on Friday, January 24.
The junior minister said that the merger of the two government-run steel companies had been ruled out as SAIL had objected to being burdened with any debt-ridden entity.
SAIL could explore the option of the merger only after RINL becomes completely debt-free, the minister said.
RINL, which had stopped production owing to a financial crunch and its inability to buy raw materials, would resume production by the end of January and reach full production by the end of August, marking a route toward profitability, he said.
Earlier this month, the Indian government had approved another infusion of funds, totaling around $1.33 billion, into RINL to enable the latter to restart operations and indicating that the government had abandoned earlier plans for the privatization of the 7.3 million mt per annum capacity steel mill located in the southern port town of Vishakhapatnam.