The Hindu Business Line : Neelachal entity plans open tender for controlling stake

THE merged entity of Neelachal Ispat Nigam Ltd (NINL) and its subsidiary, Konark Met Coke Ltd (KMCL), is set to come out with an open tender seeking equity participation for a controlling stake of 51 per cent in the company.

NINL has already sought approval of the Orissa High Court for a merger of KMCL with itself.

A detailed report prepared by AF Ferguson will be placed before the board of directors of both NINL and the major promoter, Mining and Mineral Trading Corporation Ltd (MMTC), within the next two months.

While the lenders' consortium led by IDBI and SBI has already approved the proposal for open bidding, the MMTC authorities have also held preliminary discussions with the Orissa Government, which holds a minority stake through Industrial Promotion & Investment Corporation (IPICOL).

Sources in MMTC said that the equity infusion would be required to expand the capacity of the plant from the existing 1.1 million tonnes to four million tonnes.

"Tenders will be sought for infusion of 51 per cent stake in the NINL-KMCL combine as per the original proposal," the sources said, adding that the proposal would be placed for approval of both the NINL and MMTC boards in due course.

While NINL was originally scheduled to have Rs 900 crore equity capital, the combined equity for NINL-KMCL is yet to be worked out.

"Post open tender, MMTC's stake in the project would be 26 per cent and the combined stake of different State and Central PSUs would be 49 per cent," the sources said.

On RINL, which had cleared a proposal to invest in NINL at its last board meeting, the sources said that though RINL had been discussing the issue with MMTC and the Orissa Government for more than six months, not much progress has been made.

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