DIPAM speeds up RINL disinvestment process

Visakhapatnam: THE Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance has speeded up the pace for strategic disinvestment of Rashtriya Ispat Nigam Limited (RINL) amid fears in various circles that the assets of the Navratna company maybe undervalued.

The bids shortlisted for engagement as transaction advisor to manage strategic disinvestment of RINL include Ernst & Young LLP, SBI Capital Market Limited, Deloitte Touche Tohmatsu India LLP, JM Financial Ltd and RBSA Capital Advisers LLP.

They have been advised by DIPAM to submit their presentations through slides in virtual mode on video conferencing each for a duration of 15 minutes on September 30.

"DIPAM is taking steps on a fast-track mode to finalise a successful bidder to engage a transaction advisor. Maybe they will finalise the bids in the first week of October following which they will be calling for expressions of interest (EoI) for selling RINL, its joint ventures and subsidiaries on the lines of procedures followed for sell of Neelachal Ispat Nigam Limited (NINL) and other public sector units as per the decision taken by Cabinet Committee on Economic Affairs in January, former Chairman-cum-Managing Director of RINL Y Siva Sagar Rao told Bizz Buzz on Sunday.

Visakha Ukku Parirakshana Porata Samiti chairman J Ayodhyaram said as per indications, to hasten the process for 100 per cent privatisation of RINL, the corporate entity of Visakhapatnam Steel Plant, its joint ventures and subsidiaries, the valuation will be shown less by the BJP-led NDA Government.

He said though the land bank of VSP admeasuring 20,000 acres, its machineries and other equipment for 7.3 million tonnes plant, OMDC assets in Odisha and mines in Jaggayyapeta as well as recently commissioned forged wheel plant at Rae Bareli will cost not less than Rs 2.5 lakh crore, they will be sold for a song.

"Attempts are being made not to show the land bank as the asset of RINL as they are in the name of the President of India," he alleged. When the IPO proposal was mooted in 2008, RINL value was estimated at around Rs 30,000 crore during the due diligence study by the merchant bankers.

Meanwhile, the unions have decided to shut down all seven gates leading to Visakhapatnam Steel Plant on September 30 to protest presentation by shortlisted bidders for appointment as transaction advisor.

"The entire privatisation decision seems to be a deep-rooted conspiracy by the government to favour corporates close to it to hand over RINL on a golden platter," Neerukonda Ramachandra Rao, deputy general secretary of Visakha Steel Employees' Congress, said.

As per information provided in Parliament, RINL has so far paid an interest amounting to Rs11,433 crore to the banks since its inception. For the first time, the interest liability crossed Rs.500-crore mark in 2015-16. The turnover is estimated at Rs 2.33 lakh crore since its inception in 1990-91. He said the government has shown depreciation at Rs 13,056 crore and gross margin at Rs 24,599 crore.

The INTUC leader said all the unions will not allow anyone to step into the steel plant premises to make an inspection of the assets for buying RINL.