The Union Cabinet on January 17 approved a Rs 11,440 crore revival plan to turn around the fortunes of debt-ridden Rashtriya Ispat Nigam Ltd (RINL).
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the Rs 11,440 crore revival plan for RINL, an official statement said.
The cash infusion includes Rs 10,300 crore as equity capital to RINL and Rs 1,140 crore working capital loan as 7 per cent non-cumulative preference share capital redeemable after 10 years to continue RINL.
Equity infusion of Rs 10,300 crore into RINL will help overcome operational issues related to raising working capital and start blast furnace operations in a more efficient manner, the statement said. RINL's financial position is critical, it added.
Information and Broadcasting Minister Ashwini Vaishnaw said that with this revival package, many legacy issues faced by RINL will be resolved.
The revival package will allow the company to gradually reach its full production capacity, which is crucial and will help stabilize the Indian steel market by boosting steel production and safeguarding the livelihood of employees (casual and contractual).
The revival plan envisages RINL starting full production with two blast furnaces by January 2025 and three blast furnaces by August 2025.
Under the Ministry of Steel, RINL operates Visakhapatnam Steel Plant (VSP), the only offshore steel plant in Andhra Pradesh. Its installed capacity is 7.3 Mtpa of liquid steel.
RINL had exhausted the sanctioned borrowing limits from banks for working capital and was no longer in a position to borrow from banks. RINL has defaulted on capex loan repayments and interest payments in June 2024.