MMTC, Tata Steel Long Products surge as government okays stake sale in Neelachal Ispat Nigam
At 3pm, MMTC stock was trading at Rs 63 on BSE, up 12% from its previous close, while Tata Steel Long Products gained 7% to Rs 772.
January 31, 2022 / 03:24 PM IST
divestment_new2_190_18509942
Shares of
MMTC surged nearly 14% while
Tata Steel Long Products Ltd advanced over 10% after the government approved stake sale in Neelachal Ispat Nigam Ltd (NINL).
At 3pm, MMTC stock was trading at Rs 63 on BSE, up 12% from its previous close, while Tata Steel Long Products gained 7% to Rs 772.
"Cabinet Committee on Economic Affairs has approved the highest bid of Tata Steel Long Products Ltd for 93.71% of shares of joint venture partners of four central public sector enterprises (CPSEs) and two Odisha PSEs at the bid enterprise value of Rs 12,100 crore," a government release said.
NINL is a joint venture of 4 CPSEs -- MMTC, NMDC, BHEL, and MECON -- and two Odisha government PSEs -- OMC and IPICOL. NINL has an integrated steel plant at Kalinganagar, Odisha.
The company has been seeing huge losses and the plant has been closed since March 2020. The firm had huge debt and liabilities exceeding Rs 6,600 crore as on March 2021. The company had negative networth of Rs 3,487 crore and accumulated losses of Rs 4,228 crore as of March 2021.
Post-sale, the consideration will go towards settling of the liabilities of the company, the government said.
The government had got three bids from JSW Steel, Tata Steel Long Products, and a consortium of Jindal Steel & Power Ltd and Nalwa Steel and Power.
"The transaction is on "going concern" basis and the employees of NINL will continue to be the employees of the company as per the Share Purchase Agreement (SPA), which binds the buyer to have a lock-in period of one year. The strategic buyer will also be bound to follow the terms of voluntary retirement scheme applicable to CPSEs whenever such a decision is taken," the government said in the release.
