
The Union Cabinet, under the leadership of Prime Minister Narendra Modi, gave the green light to a significant revival plan worth Rs 11,440 crore for Rashtriya Ispat Nigam Ltd (RINL) to help the company overcome its financial burdens. This comprehensive plan involves injecting Rs 10,300 crore as equity capital into RINL and transforming Rs 1,140 crore of working capital loan into non-cumulative preference share capital with a redemption period of 10 years, intended to maintain RINL's viability for the future.
The infusion of equity capital into RINL, as part of the approved revival plan, aims to address the operational challenges hindering the company from obtaining necessary working capital and commencing blast furnace operations efficiently. The official statement highlighted the critical financial situation of RINL and emphasized the importance of this infusion to counter the ongoing problems effectively. Information and Broadcasting Minister Ashwini Vaishnaw expressed optimism that the revival package would tackle longstanding issues faced by RINL and facilitate its journey towards stability and growth in the Indian steel market.
With the proposed revival package, RINL is expected to gradually ramp up its production capacity, ensuring the stability of the Indian steel market and safeguarding the jobs of both regular and contractual employees. The plan envisions RINL reaching full production capacity with two blast furnaces operational by January 2025 and subsequently expanding to three blast furnaces by August 2025. Under the Ministry of Steel, RINL currently manages the Visakhapatnam Steel Plant (VSP), the lone offshore steel plant in Andhra Pradesh, with a liquid steel capacity of 7.3 Mtpa.
Facing challenges such as reaching the borrowing limits set by banks for working capital and defaulting on loan repayments in June 2024, RINL was in urgent need of financial intervention to sustain its operations and revitalize its position in the steel industry.