The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Mr. Narendra Modi, has approved the revival plan for RINL for a total of Rs 11,440 crores.
The infusion includes Rs.10,300 crore as equity capital into Rashtriya Ispat Nigam Ltd. (RINL) and Conversion of Rs.1140 crore working capital loan as 7% Non-cumulative Preference Share Capital redeemable after 10 years to keep RINL as a going concern.
The financial condition of RINL is critical (as on 31.03.2024, the net worth of RINL was Rs. (-) 4538.00 crore, current assets were Rs. 7,686.24 and current liabilities were Rs.26,114.92 crores).
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.
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 most productively.
This 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 RINL will start full production with two blast furnaces in January 2025 and with three blast furnaces in August 2025. RINL is a Schedule–A CPSE under the administrative control of Ministry of Steel with 100% ownership of Government of India. RINL operates the Visakhapatnam Steel Plant (VSP), the only offshore steel plant under Government sector in the state of Andhra Pradesh. It has an installed capacity of 7.3 Mtpa of liquid steel.
