The Union Government is taking steps to offload 10 per cent of its equity stake in Rashtriya Ispat Nigam Limited (RINL), but the fears that the step may ultimately lead to total dilution and privatisation of the company are unfounded, according to Mr A. P. Chowdhary, the Chairman and Managing Director.
In an interview here on Thursday, he said: “The government has not privatised any public sector unit after Balco. Hence, there is no scope for the proposed 10 per cent offloading of Government's equity in RINL paving the way for privatisation of the company.”
He said the unions and the employees should not worry over disinvestment and said that its listing, which was essential to retain Navratna status by November 16, would only enhance the credibility of the company in the market. He said the steel plant had set itself the target of achieving a turnover of Rs 20,000 crore this year as against last year's Rs 14,457 crore.
Mr Chowdhary said that steel plant was currently expanding its capacity to 6.3 million tonnes from the present 3 million tonnes and in the next phase it would be raised to 11 million tonnes. A sum of Rs 20,000 crore would be needed for the next phase of expansion, for which borrowings would become necessary in addition to internal accruals. The debt-equity ratio would be 1:1.
Mr Choudhary said listing would give greater confidence to the financial institutions to invest in RINL. He said RINL was making sustained efforts to improve raw material security, as it did not have captive iron ore mines.
The Andhra Pradesh Government had promised to consider its request for mines seriously and “in all probability we will arrive at an understainding with the State Government and we may get the iron ore from the Bayyaram mines. We have also requested the State Government to grant us mines in Prakasam and other districts.”
He said the Rajasthan Government was also seriously considering RINL's request for captive iron ore mines.