Naveen Jindal-led Jindal Steel & Power is planning to “seriously pursue” state-run steel plant Neelachal Ispat Nigam Ltd (NINL) for which the government is expected to open bids on December 23.
“We are very serious about this asset. For us, the chances are also better, I think … Though the highest bidder will get the chance, I think we can turn around the asset faster,” JSPL managing director VR Sharma said during an interaction with ET.
Sharma is projecting a fair value of around Rs 5,000 crore for the assets of NINL, including its land and mines.
Department of Investment and Public Asset Management secretary Tuhin Kanta Pandey last month stated that the Centre was looking forward to completing the financial bids for the remaining six public sector undertakings that were listed for divestment. These are BPCL, BEML, Shipping Corporation of India, Pawan Hans, Central Electronics and NINL.
Several companies in the metal industry have submitted expressions of interest (EoIs) for NINL. From them, ArcelorMittal, JSW Steel, Hyderabad-based Megha Engineering & Infrastructure, Tata Steel and JSPL are among firms that have been shortlisted.
In an earlier interaction, Tata Steel managing director TV Narendran said that the company was planning to expand its long-product portfolio, and was pursuing acquisitions such as of state-owned NINL and Rashtriya Ispat Nigam for this.
NINL is a 1.1-million-tonne-per-annum integrated steel company located at the Kalinganagar Industrial Complex in Jajpur, Odisha. It has around 2,500 acres of land on lease from the Odisha government.
“If we win the asset, we are planning to set up a wire-drawing facility, a wire-rod facility and we want to put up a container facility there … We are also interested in putting up a commercial coke oven plant, as we have secured coking coal mines in Australia recently,” Sharma said.
JSPL is also planning to tie up with its sister company, Jindal Stainless, to set up a stainless steel wire rod plant.
NINL has the proximity to iron ore mines, seaport, railway network and expressway, said Sharma.
However, NINL has incurred around Rs 3,234 crore of loss in the last five years.
“The company is loss-making. However, with some investment, we can turn it around … we can invest in the downstream rolling facility and further value addition can yield good results,” Sharma said.
JSPL has plans to double its capacity at the Angul plant in Odisha to 12 million tonnes per annum in the next three years and is also planning to cut debt in the coming years.
“If it comes at a price that we are aiming at, we will have enough room available … Our plans to bring down debt will remain as it is. We have a solid plan on how to revive, how to fund and how to plough back and re-invest in NINL without compromising on overall debt levels,” Sharma said.
Source : Economic Times
