Tata Group takes over Neelachal Ispat

New Delhi: The privatisation of Neelachal Ispat Nigam Ltd (NINL) was completed on Monday, with its handover to Tata group firm TSLP, the Finance Ministry said.

NINL is the second successful privatisation by the current government. Incidentally, Air India -- the first company on the privatisation list -- too was bought by Tata Group. Tata Steel Long Products (TSLP) had in January emerged as the winning bidder, putting in bids worth Rs12,100 crore for loss-making NINL, which is a joint venture of 4 CPSEs -- MMTC, NMDC, BHEL, MECON - and 2 Odisha government PSUs - OMC and IPICOL. "NINL Strategic Disinvestment transaction has been completed today with the transfer of 93.71 per cent shares of the joint venture partners to the Strategic Buyer, Tata Steel Long productsLtd," the ministry said.

The Rs12,100 crore has been utilised for settlement of dues of employees, operational creditors, secured financial creditors and sellers (operational and financial dues) and for equity of selling shareholders, as per the share purchase agreement. MMTC was the largest shareholder in NINL holding 49.78 per cent stake, NMDC (10.10 per cent), BHEL (0.68 per cent), and MECON (0.68 per cent). Besides, 2 Odisha government PSUs - held 20.47 per cent and 12 per cent, respectively, in NINL.

The share purchase agreement was signed on March 10, following which the buyer, NINL and the six selling shareholders worked towards satisfying a set of conditions defined in the SPA, including certification of operational creditor's dues, employees' dues, sellers' operational and financial dues.

"These conditions have since been met to mutual satisfaction," the ministry said. TSLP's bid was more than double the reserve or base price of Rs 5,616.97 crore for NINL. Since the government does not hold any equity in the company, the sale proceeds would not accrue to the exchequer.