The Hindu Business Line : Cabinet clears Konark Met merger with Neelachal

THE Union Cabinet on Wednesday approved the merger of Konark Met Coke Ltd (KMCL) with Neelachal Ispat Nigam Ltd (NINL), the two joint venture projects promoted by public sector MMTC.

The merger will result in savings of about Rs 91 crore per annum to the merged entity with replacement of high cost loans with low interest loans and conversion of Rs 61 crore debt into equity/preference share capital, a statement issued after the Cabinet meeting said.

Liquidated damage and penal interest of the combined entity will also be waived and interest and compound interest will be converted into zero coupon bonds by financial institutions and banks.

The statement said the merger would result in better economies of scale, better capacity utilisation and de-bottlenecking of facilities. It will also result in streamlining of administrative functions and savings.

The merged company would be able to utilise an amount of Rs 35 crore which is lying in CENVAT account unutilised in Konark Met.

CCEA okays NLC proposal: The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal of Neyveli Lignite Corporation to set up a 250-MW lignite-fired thermal power plant in Bikaner district of Rajasthan.

The CCEA, which met under the chairmanship of the Prime Minister, Dr Manmohan Singh, also approved the associated lignite-mining project.

The 2x125 MW power project would cost Rs 1,114.18 crore while the 2.1-million tonnes per annum mining project at Village Barsingsar, Bikaner, would cost Rs 254.07 crore, a Government statement issued after the CCEA meeting said.

The Barsingsar mine project will meet the lignite requirement of thermal power plant. The power generated from the thermal power project (2x125 MW units) will cater to the demand of Rajasthan, it said.

The Rs 1,114.18 crore cost of power plant included Rs 82.35 crore towards interest during construction and also had a foreign exchange component of Rs 260.15 crore ($ 58.83 million).

An amount of Rs 20.51 crore was estimated to be interest during construction of the mining project.

The Union Cabinet also gave its approval for signing, on behalf of the Customs Administration of the Government, the International Convention on Mutual Administrative Assistance in Customs Matters.

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