The country’s largest iron-ore producer NMDC Ltd is expecting to complete the demerger process of its upcoming 3 million tonne per annum Nagarnar iron and steel plant by “late March or around April-June”. and the value unlocking will happen once the steel plant gets listed “in another two to three months”.

According to Amitava Mukherjee, Director (Finance), NMDC Ltd, the State-run company has requested for waiver of creditors meeting. If the Ministry of Corporate Affairs (MCA) accedes to the request, then the demerger process could be completed by March-end or end-of-April.

Necessary clearances from SEBI and the stock exchanges have already been received.

In case, the MCA “directs” NMDC to go ahead with a creditors meeting (there are two creditors), then there could be a delay of “a month or a month-and-a-half”.

“So, if (the) MCA were not to exempt us, then the procedure will extend by a month or a month and a half because we will have to give at least a 21-day notice for the creditors meeting, then have a creditors meeting then get it filed all over again. That will extend the process by about two months,” he said during a post earnings investor call.

The NMDC Board had earlier approved the “scheme of arrangement for de-merger” between NMDC and NMDC Steel Ltd, according to a regulatory filing. The steel unit was to be listed separately on the bourses.

Mukherjee added that it should take “two to three months to list a new company in the stock markets”, once the demerger is complete

“So, once the demerger is complete, the new company will take the necessary steps to get itself listed in the market. So, that should take listing up a new company takes hardly a two-to-three months not more than that,” he said.

Steel plant commissioning

The commissioning of 3 mtpa steel plant in Chattisgarh has begun and commercial production is expected around July. The management indicated that coke oven heating process has begun and production is expected “maybe in the end-of-March” or “beginning-of-April”. Nearly ₹19500 crore has been invested till Q3 FY22 in the project.

Sale of Neelanchal Ispat

According to Mukherjee, NMDC is “going to make a windfall profit” of around ₹400–500 crore in cash from the sale proceeds of Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products Ltd.

NMDC, a 10 per cent stake holder in NINL, had given an interest-bearing loan of around ₹80 crore.

“So, we will be comfortably getting the entire thing back along with interest,” he said.

“I think at the outset, more than ₹5,000 crore will be left over after meeting all its liabilities (of NINL) and we will get 10 per cent of that. ”.

NINL has been closed since March 2020 and its debt and liabilities exceeded ₹6,600 crore as on March 31, 2021.

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