The Cabinet Committee on Economic Affairs (CCEA) gave in-principle approval for 100 percent divestment of Centre's stake in Rashtriya Ispat Nigam Limited (RINL), the Department of Investment and Public Asset Management (DIPAM) said on February 3.
RINL, a corporate entity of Visakhapatnam Steel Plant, is run by the Government of India (GOI). As per the decision finalised by the Cabinet, the Centre would completely divest its stake from the loss-making public sector unit (PSU).
"CCEA on 27th Jan 2021 has given in-principle approval for 100% strategic disinvestment of GOI shareholding in RINL along with management control by way of privatization," stated the tweet posted on the official social media handle of DIPAM Secretary.
Also read: I believe we can exceed the divestment target for 2021-22: Anurag Thakur
The Vizag-based steel plant, which had recently embarked upon a plan to scale its steel-making capacity to 7.3 million tonnes per annum (mtpa), had enrolled over 17,500 employees by March 2019.
The state-run steelmaker has been reeling under losses over the past few years. It reported a loss of Rs 1,369 crore in 2017-18 and Rs 3,910-crore loss in 2019-20.
In 2018-19, it had reported a brief profit of Rs 97 crore, which was not sufficient to overcome the loss suffered in the preceding year.
On January 1, RINL-VSP's Chairman and Managing Director PK Rath had expressed optimism, claiming that the group is expected to score a net profit of Rs 170 crore after 29 months.
"We have crossed Rs.2,100 crore sales turnover in December 2020 after a gap of 20 months and we are expecting to achieve a net profit of Rs 170 crore in December 2020, after a gap of 29 months," an RINL press release quoted him as saying.
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