The Union Cabinet has approved a Rs 11,440 crore revival plan for debt-laden Rashtriya Ispat Nigam Ltd (RINL), according to a statement released on Friday.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the revival plan for RINL for Rs 11,440 crore, it said.
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“…RINL has a very special position in the entire steel industry. This is one of those plants which is located on the coast in Andhra Pradesh. This is a very important steel company in the overall steel sector of the country. And, with this revival package many of the historical legacy problems that RINL used to face will be resolved,” Union Minister Ashwini Vaishnaw said.
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With this revival, Andhra Pradesh will get a major steel plant revived, he said, adding that two blast furnaces in the plant will start functioning in the coming days and all three blast furnaces are expected to become functional by August.
The Rs 11,440 crore revival package includes fresh equity infusion of Rs 10,3000 crore. There will also be conversion of Rs 1,140 crore working capital loan as 7 per cent non-cumulative preference share capital redeemable after 10 years to keep RINL as a going concern, the statement said.
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 in the most productive way, the statement said.
The financial condition of RINL is critical, the statement said, adding that 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 revival package would allow the company to gradually reach its full production capacity,
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