In a significant move, the Union Cabinet has approved a Rs 11,440 crore revival package for the troubled Rashtriya Ispat Nigam Limited (RINL), also known as Vizag Steel, which has been grappling with mounting debt. The package aims to stabilize the company’s operations and ensure its future.
The financial boost includes Rs 10,300 crore as equity capital and Rs 1,140 crore for converting RINL’s working capital loan into preference share capital, redeemable after 10 years. This support is expected to resolve several legacy issues that have hindered the company’s progress. Union Minister Ashwini Vaishnaw assured that this infusion would enable RINL to address its operational challenges and secure its position as a crucial player in India’s steel sector.
RINL, which operates the Visakhapatnam Steel Plant (VSP), has been struggling financially with a net worth of Rs (-)4,538 crore as of FY24. The company had exhausted its borrowing limits and faced difficulties in securing new loans, leading to defaults on loan repayments. Despite these challenges, the government remains committed to modernizing the plant and ensuring it operates at full capacity, which is essential to maintaining stability in India’s steel market.
With this package, RINL is expected to gradually increase its production capacity, reaching full capacity with three blast furnaces by August 2025. The revival will also protect the livelihoods of thousands of employees and contribute to the country’s economic growth.
In addition, RINL had previously sold its forged wheel plant to Indian Railways for Rs 2,250 crore to alleviate financial pressure, and the proceeds were used to clear some of its debts. The government’s continued support will ensure the company plays a vital role in India’s steel industry.
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