The Government of India is seriously contemplating merging two Public Sector Units (PSUs)-RINL and SAIL. It is being done to explore options to ensure survival of RINL’s unit and resolve the financial and operational hardship that the Andhra Pradesh-based steel maker is currently passing through.
The merger plan was mooted as both the Rashtriya Ispat Nigam Limited (RINL) and the Steel Authority of India Limited (SAIL) are state-owned under the same ministry- the Ministry of Steel under the Government of India.
According to sources, the Visakhapatnam unit of the RINL is in acute financial distress and the exercise is aimed at finding solution to the crisis. The pressing need to bail the RINL unit out of the crisis can be better understood by the fact that the Visakhapatnam plant is the country’s first shore based integrated steel plant that owns and operates a 9.5 million tones plant.
The State Bank of India (SBI) has a huge loan exposure being the public sector lender and that is the reason why SBI’s top officials recently held a meeting with Steel Secretary over the issue.
The solution lies in providing capital to ensure continuity of operations at the RINL plant. According to sources, other option like sale of land parcel to NMDC and bank loans are also being worked out.
