Calls for Divestment of 22 acres of VSP plot & Sale of Rae Bareli forged wheel plant
Mr GVL Narasimha Rao, Member of Parliament Rajya Sabha recently called upon Union Steel Minister Mr Jyotiraditya Scindia and Steel Secretary, Mr Nagendra Nath Sinha to seek urgent financial assistance for RINL.
In a meeting with the Union Minister of Steel and Steel Secretary the Rajya Sabha MP reiterated that due to non-availability of working material, high raw material cost and adverse market conditions, the capacity utilisation of Rashtriya Ispat Nigam Limited (RINL.) has been lower this year which he said has adversely impacted the financials of the company.
‘Banks have not been extending loans to RINL due to the low credit rating of RINL. Further, rate of interest charged to RINL by banks is significantly higher than market lending rates’ wrote the MP in his letters addressed both to the union minister and steel secretary.
And in order to address this concern the MP suggested as an interim measure that working capital availability can be arranged internally by divesting some non-core assets like the forged wheel plant at Rae Bareli plant and 22-acre land plot in Visakhapatnam city.
‘This will provide the immediate liquidity for the RINL to increase RINIL’s production. A stronger impetus or infusion of funds is required to ensure that the RINL becomes fully operational and profitable as RINL is the largest industrial unit in Andhra Pradesh and its performance is vital for state’s economy and for the livelihoods of over a lakh families’ noted the letter written by the MP to the union minister.
He further opined that employee morale is also low at RINL as the wage revision for workers in RINL has not been done since 2017 although an MoU was signed between management and employee unions on 6th April, 2022. The promotion of executives has been held up though its financial impact on the company is very limited, said Mr GVL.