The Government has annulled the transaction for strategic disinvestment of Karnataka based Visvesvaraya Iron & Steel Plant (VISP), a unit of SAIL. This is the third instance in recent times after the BPCL and Central Electronics Limited strategic disinvestment was put off.

Lack of Bidder interest

“Due to insufficient bidder interest in proceeding further with the transaction, Government of India, with the approval of Alternative Mechanism (Empowered Group of Ministers) has decided to annul the EoI (Expression of Interest) and thereby terminating the present transaction,” Department of Investment and Public Asset Management (DIPAM) said in a public notice.

After approval from the Cabinet Committee on Economic Affairs (CCEA), global EoI was invited on July 04, 2019. DIAPM said that multiple EoIs had been received and qualified bidders had conducted due diligence.

NITI’s recommendations

NITI Aayog, in its report dated August 2, 2016 recommended a set of central public sector enterprises for disinvestment. The recommendations included strategic disinvestment of the three special steel plants of SAIL — Visvesvaraya Iron and Steel Plant, Alloy Steels Plant and Salem Steel Plant — to a technology partner-cum investor with management control. The recommendations got approval from CCEA and then from the board of SAIL.  It was decided that as a part of the strategic disinvestment, VISP divested unit will be transferred to the strategic investor on a going concern basis, i.e. by way of slump sale through business transfer agreement.

VISP has an installed capacity of 2,16,000 TPA of hot metal and 98,280 TPA of saleable steels. Its plant is located at Bhadravati in Shimoga District of Karnataka, at a distance of about 240 km from Bangalore.

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