Tata Steel Acquires Neelachal Ispat Nigam for Rs 12,100 Crore; Know Details

The strategic disinvestment of government-backed Neelachal Ispat Nigam Limited (NINL) has been completed with Tata Steel Long products Limited acquiring the company for Rs 12,100 crore, the Centre announced on Monday. Tata Steel arm – Tata Steel Long Products (TSLP)- had in January this year won the bid to acquire a 93.71 per cent stake in Odisha-based NINL. It was earlier anticipated that the process will be completed by the end of the March to June quarter.

“MNINL Strategic Disinvestment transaction has been completed today with the transfer of 93.71 per cent shares of the Joint Venture Partners (4 CPSEs and 2 Odisha Govt. PSUs) to the Strategic Buyer, M/s Tata Steel Long products Limited. The Enterprise Value paid by the Strategic Buyer is Rs. 12,100 Crores,” said the finance ministry in a statement on Monday.

Neelachal Ispat Nigam Limited (NINL) is a joint venture of 4 CPSEs, namely — MMTC with a shareholding of 49.78 per cent; NMDC with a shareholding of 10.10 per cent; BHEL and MECON, which have 0.68 per cent shares each; and two Odisha Government PSUs, namely — OMC with 20.47 per cent shares and IPICOL with 12.00 per cent shares.

This payment has been utilised as per the SPA for settlement of dues of employees, operational creditors, secured financial creditors and sellers (operational and financial dues) and for equity of selling shareholders as per SPA, the finance ministry said in its statement on Monday.

“Following approval of the highest price bid of M/s Tata Steel Long Products Limited on 31st January, 2022, the Letter of Award (LOA) was issued to the winning bidder on 2nd February, 2022.The Share Purchase Agreement (SPA) was signed on 10th March, 2022,” said the government.

“Thereafter, Tata Steel, NINL and the six selling shareholders worked towards satisfying a set of conditions defined in the SPA including certification of operational creditor’s dues, employees’ dues, sellers’ operational dues and sellers’ financial dues. These conditions have since been met to mutual satisfaction,” it added.

After acquiring Neelchal Ispat nigam Limited, Tata Steel had described the acquisition as a “crucial” one for the company’s growth trajectory, adding that it provides enablers to go well beyond the 40 MTPA (million tonne per annum) target.

“We have acquired NINL as part of the government’s disinvestment programme which is of great strategic and operational value to Tata Steel. The acquisition of NINL provides a significant opportunity for Tata Steel to not only restart the 1 million tonnes per annum steel plant expeditiously but also begin work immediately to build a 4.5 million tonnes per annum state-of-the-art long products complex in the next few years, a Tata Steel official had told PTI.

NINL has an integrated steel plant with a capacity of 1.1 million tonnes (MT), at Kalinganagar, Odisha. The company had been running in huge losses and the plant is closed since March 30, 2020.