The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a comprehensive revival package of Rs 11,440 crore for Rashtriya Ispat Nigam Limited (RINL), also known as the Visakhapatnam Steel Plant. This decision, taken by the Cabinet Committee on Economic Affairs (CCEA), aims to address the financial and operational challenges faced by the debt-laden public sector steel producer.
Revival Package Details:
The package includes:
- Equity Infusion: Rs 10,300 crore to strengthen working capital and operational capacity.
- Loan Conversion: Rs 1,140 crore of working capital loans converted into 7% non-cumulative preference share capital, redeemable after 10 years.
This support ensures the continuity of RINL’s operations and provides a pathway to stabilize its finances.
Operational Boost:
Minister for Information and Broadcasting, Mr. Ashwini Vaishnaw, emphasized that the revival package would resolve RINL’s legacy issues and enable the company to restart blast furnace operations efficiently. The plan aims for RINL to reach full production capacity, with two blast furnaces operational by January 2025 and three by August 2025.
RINL operates the Visakhapatnam Steel Plant, India’s only shore-based steel plant, with an installed liquid steel production capacity of 7.3 million tonnes per annum (Mtpa).
Addressing Financial Challenges:
RINL had faced severe financial constraints, including:
- Exhaustion of sanctioned borrowing limits for working capital.
- Defaults on capital expenditure loan repayments and interest payments in June 2024.
The revival package provides a lifeline to stabilize operations and address these financial issues.
Strategic Importance:
Under the Ministry of Steel, RINL is a critical player in India’s steel industry. This revival aligns with the government’s broader goals of:
- Enhancing domestic steel production.
- Safeguarding jobs for thousands of employees and contractors.
- Strengthening India’s self-reliance in industrial capacity.
The revival package underscores the government’s commitment to preserving strategic public sector enterprises and fostering growth in the manufacturing sector.
