The Union Cabinet on January 17 approved a Rs 11,440 crore revival plan for debt-ridden Rashtriya Ispat Nigam Ltd (RINL) to turn around its fortunes.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the Rs 11,440 crore revival plan for RINL, an official statement said.
The infusion includes Rs 10,300 crore as share capital to RINL and conversion of loan to working capital of Rs 1,140 crore as 7 per cent non-cumulative preference share capital repayable after 10 years to keep RINL a going concern.
The injection of Rs 10,300 crore equity in RINL will help it overcome operational challenges related to raising working capital and start blast furnace operations in the most productive manner, the statement said. RINL's financial situation is critical, he added.
Information and Broadcasting Minister Ashwini Vaishnaw said that with this revival package, many problems faced by RINL earlier will be resolved.
The revival package would enable the company to gradually reach full production capacity which is critical and ensure stability in the Indian steel market by expanding steel production and also save the livelihood of employees (regular and contract).
The recovery plan envisages RINL starting full production with two blast furnaces in January 2025 and with three blast furnaces by August 2025.
Under the Ministry of Steel, RINL operates the Visakhapatnam Steel Plant (VSP), the only coastal steel plant in Andhra Pradesh. It has an installed capacity of 7.3 Mtpa of liquid steel.
RINL had exhausted the sanctioned limits on bank borrowings for working capital and was unable to raise additional loans from banks. RINL also defaulted on loan and interest payments in June 2024.
