Date:15/10/2004 URL: http://www.thehindubusinessline.com/2004/10/15/stories/2004101502260200.htm

Back MMTC to approach Ministry on NINL open tender issue

Pratim Ranjan Bose

Kolkata , Oct. 14

THE board of directors of MMTC on Thursday decided to formally approach the Union Commerce Ministry for issuing an open tender next week inviting up to 51 per cent equity participation in Neelachal Ispat Nigam Ltd (NINL).

The development practically rules out the participation of Vizag Steel in NINL.

MMTC sources said that though the issue of open tender had already been discussed with the Ministry, a formal proposal to this effect would be sent next week. As per the proposal prepared through A.F. Ferguson, the equity participation will ensure expansion of NINL from the existing 1.1 million tonnes to 4 m.t. MMTC will hold 26 per cent stake in Neelachal Ispat after the inclusion of the new partner.

The lenders' consortia led by IDBI and State Bank of India has already approved the proposal for the open-bidding route.

As for the consent of the Orissa Government, which is a minority stakeholder in NINL through Industrial Promotion & Investment Corporation, the sources said that the State Government had already extended an "in-principle approval" regarding the issue of involving a new partner to ensure its future expansion and development.

"However, following our proposal, the Ministry will discuss the issues with all the stakeholders including the Orissa Government, before making a formal proposal before the cabinet committee."

Apart from RINL, which had expressed an interest in NINL, several other Indian steel and foreign steel majors, including Posco, Tata Steel and SAIL, had previously shown an interest in picking up a stake in Neelachal Ispat.