The country’s largest iron-ore miner, National Mineral Development Corporation (NMDC) , may issue shares in the ratio of 1:1 as it looks to demerge and subsequently list shares of its steel subsidiary, NMDC Steel.
The listing process will take a few more months post a June 7 meeting of its shareholders and creditors for approval of the demerger process.
The NMDC Board had earlier approved the “scheme of arrangement for de-merger” between NMDC and NMDC Steel, according to a regulatory filing.
Speaking at the earnings call, post Q4 results, Amitava Mukherjee, Director of Finance at NMDC, said, the Ministry of Corporate Affairs (MCA) has called for a meeting of creditors and meeting of shareholders, both of which will be on June 7, and notices in this regard was issued on May 4.
NMDC had previously requested the MCA for waiver of the creditors’ meeting, which in turn would have sped up the listing or demerger process, sources aware told BusinessLine.
The Union Steel Ministry’s additional secretary has been nominated by MCA to chair meetings.
“So, after that, these are carried through in both the creditors forum and in the shareholders will be going back to the MCA. Once the orders are passed by the Government of India, then we need to file it back with the stock exchanges. And then we need to issue share in the ratio of 1: 1 and then list that share in the stock exchange,” he said.
“It should take around three months after we file compliance or the detailed report regarding these meetings on June 7. So, let’s see another couple of months (after that) maybe for listing of shares of NMDC Steel,” Mukherjee added.
Commissioning of Nagarnar plant
However, commissioning of the 3 million tonne per annum (mtpa) Nagarnar plant—the steel plant for which the subsidiary was set up—is expected around “July end or early August”.
A breakdown at the site—burning down of motor made by BHEL at the oxygen plant—came as a set-back. And the company was looking at ancillary means to make the plant operational.
According to Mukherjee, NMDC has been heating the cocoon for 3 months—as a part of the commissioning process—and core consignments have already arrived at Nagarnar. “We are ready for coke pushing, but unfortunately, in a major breakdown at the oxygen plant, one 11 kV motor got burned,” he said adding that the cocoon is to be dry cooled, in terms the dry fencing has to be done with nitrogen.
“So we are looking for alternative ways including getting nitrogen through tankers. And of course, this motor itself has already been sent to mobile works of BHEL,” Mukherjee explained Once the repairing is done, in “another 10 – 15 days” for the equipment to be reinstalled.
According to Mukherjee, operating a full-fledged plant based on nitrogen from tankers would be a risk factor.