Government floats EoI to privatise Neelachal Ispat

The Central government, vide order dated Jan 5, in exercise of its powers u/s 20A of the MMDR Act, 1957 has granted permission to sell up to 25% of the annual iron ore production of NINL as per the MDPA executed by the company for a period of 1 year or till the completion of disinvestment of the company, whichever is earlier, under intimation to the State Government and Indian Bureau of Mines.

The Union government has floated Expression of Interest for strategic disinvestment of Neelachal Ispat Nigam Ltd.

The 1.1 million tons Kaliganagar-based entity has been promoted by Minerals & Metals Trading Corp Ltd (MMTC) holding 49.78 percent of the share capital and Odisha government-owned Industrial Promotion & Investment Corporation of Odisha Ltd holding 12 percent stake.

Apart from two promoters, Neelachal Ispat counts National Mineral Development Corp (NMDC), MECON, BHEL and Odisha Mining Corporation Ltd as its shareholders.

“SBI Capital Markets Ltd has been retained as transaction advisor and L&L Partners as legal advisor by Department of Investment & Public Asset Management (DIPAM) for advising and managing the proposed strategic disinvestment of 100 percent shareholding of MMTC (49.78 percent), NMDC (10.1 percent), MECON (0.68 percent) and BHEL (0.68 percent) and two Government of Odisha State PSUs namely IPICOL (12 percent) and OMC (20.47 percent) in Neelachal lspat Nigam,” the Preliminary Information Memorandum and Request for EOI said.

The Cabinet Committee on Economic Affairs (CCEA) in January 2020 gave in-principle approval for strategic disinvestment of equity shareholdings of the shareholders.

Neelachal Ispat was incorporated in 1982 and has set up its manufacturing facility in two phases.

In Phase I, the company had built the blast furnace of 1.1 million tons a year capacity to produce pig iron which was commissioned in 2002.

Subsequently, other supporting facilities like Sinter plant, Coke oven plant, Power plant were commissioned.