The strategic disinvestment process of Neelachal Ispat Nigam Limited (NINL) has been completed, announced Ministry of Finance on Monday with Tata Steel Long Products taking over the company.
NINL is a joint venture of 4 Central Public Sector Enterprises (CPSEs), namely Metals and Minerals Trading Corporation (MMTC), National Mineral Development Corporation (NMDC), Bharat Heavy Electricals Limited (BHEL), Metallurgical Engineering Consultants Limited (MECON), Odisha Mining Corporation (OMC) and Industrial Promotion Investment Corporation of Odisha (IPICOL).
NINL’s strategic disinvestment transaction has been completed with the transfer of 93.71 per cent shares of the Joint Venture Partners - MMTC with 49.78 per cent shareholding, NMDC with 10.10 per cent, BHEL with 0.68 per cent, MECON with 0.68 per cent, OMC with 20.47 per cent and IPICOL with 12.00 per cent - to the strategic buyer Tata Steel Long Products Limited, a subsidiary of Tata Steel, stated the Ministry.
The acquisition of NINL was critical for Tata Steel to build a dedicated long products complex as NINL has its own captive power plant to meet the internal power requirement and air separation unit for producing oxygen, nitrogen and argon.
It further added that the enterprise value paid by Tata Steel is Rs 12,100 crore and the payment has been utilised as per the Share Purchase Agreement (SPA) for the settlement of dues of employees, operational creditors, secured financial creditors and sellers (operational and financial dues) and for equity of selling shareholders as per SPA.
Following approval of the highest price bid of Tata Steel Long Products Limited on January 31, 2022, the Letter of Award (LOA) was issued to the winning bidder on February 2, 2022, and the SPA was signed on March 10, 2022.
The Ministry of Finance also stated that NINL and its six selling shareholders worked towards satisfying a set of conditions defined in the SPA including certification of operational creditor’s dues, employees’ dues, sellers’ operational dues and sellers’ financial dues. These conditions have since been met to mutual satisfaction, it added.