Revival Plan Approved for RINL

The Indian Union Cabinet has given the green light to a significant financial package aimed at reviving the debt-laden Rashtriya Ispat Nigam (RINL). The plan, amounting to Rs 11,440 crore, was approved by the Cabinet Committee on Economic Affairs (CCEA), under the leadership of Prime Minister Narendra Modi.

This comprehensive revival package includes an equity capital infusion of Rs 10,300 crore into RINL and the conversion of a Rs 1,140 crore working capital loan into 7% non-cumulative preference share capital, redeemable after 10 years. This strategic move is designed to ensure RINL's continuity as a going concern.

Impact of the Revival Plan

According to Ashwini Vaishnaw, the Minister of Information and Broadcasting, this financial infusion will address many of the legacy issues plaguing RINL. The equity infusion is expected to alleviate operational challenges, particularly in raising working capital, thereby enabling the company to optimize blast furnace operations.

The revival strategy aims to gradually restore RINL's full production capacity, which is crucial for stabilizing the Indian steel market. This initiative not only supports the augmentation of steel production but also safeguards the livelihoods of both regular and contractual employees, as well as those dependent on the steel plant's operations.

Future Production Goals

RINL, which operates the Visakhapatnam Steel Plant (VSP) in Andhra Pradesh, plans to commence full production with two blast furnaces by January 2025 and increase to three by August 2025. The VSP, with an installed capacity of 7.3 Mtpa of liquid steel, is the only offshore steel plant in the region.

The financial health of RINL has been critical, with the company exhausting its borrowing limits and defaulting on capex loan repayments and interest payments in June 2024. This revival plan is a pivotal step towards securing the company's future and contributing to the national interest by enhancing steel production in India.