The government is expected to finalise a comprehensive revival plan for Rashtriya Ispat Nigam Ltd (RINL) by December. This plan will address the restructuring of RINL's Rs 75 billion dues, which are nearing classification as non-performing assets, according to a senior government official.
Discussions with creditors are currently underway, and the government has provided short-term relief measures, including a Rs 11.4 billion loan and a Rs 5 billion emergency grant, to keep RINL operational until the revival strategy is established. The loan will be used to settle bank dues, while the grant will cover outstanding Goods and Services Tax (GST) and partially pay operational creditors like coal suppliers.
The official mentioned that the previous divestment plan for the public sector enterprise has been set aside. RINL's largest lender, State Bank of India (SBI), is owed nearly Rs 105 billion. SBI Capital Markets Limited (SBICAP) is currently evaluating RINL's operational and cost inefficiencies to propose measures to reduce losses.
RINL faces significant challenges, with only one of its three blast furnaces operational in September, as it grapples with a shortage of raw materials and cash flow issues. Currently, the plant operates at 1.25-1.3 million tonnes of its total capacity of 7.3 million tonnes.
Overall, RINL's total outstanding debt stands at approximately Rs 350 billion, comprising Rs 75 billion owed to vendors and Rs 180 billion to banks. In September, SBI presented to officials from the Department of Financial Services (DFS) and the Ministry of Steel to explore solutions for RINL's financial difficulties. (ET)
