RINL clears sale of 25% Govt equity

RINL clears sale of 25% Govt equity
PTI
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First Published: Mon, Dec 03 2007. 01 49 PM IST
Updated: Mon, Dec 03 2007. 01 49 PM IST
New Delhi: The government will soon offload 25% stake in Rashtriya Ispat Nigam Limited, making it the first disinvestment in a profit-making steel PSU.
“In response to a proposal of the Finance Ministry asking us to consider offloading some stake, the RINL Board has okayed (sale of) 25% stake in the company, of which 5% would go to the employees and the remaining 20% to the public,” RINL chairman and managing director P. K. Bishnoi said.
Steel Minister Ram Vilas Paswan had earlier categorically opposed any dilution of stake in any of his ministry’s PSU.
When asked, a top steel ministry official confirmed that the ministry has received the RINL board’s approval to this effect.
“The Finance Ministry wrote to us about a year ago suggesting whether RINL could consider offloading stake in the company, to which our board took this decision,” Bishnoi said.
The RINL CMD said disinvestment in PSUs were of two categories -- one wherein 49% stake could be offloaded and another where 25% stake could be diluted.
According to sources, offloading of stake would fetch nearly Rs4,000 crore to the government. The company had reported a net profit of about Rs1,350 crore last fiscal and the equity capital of the company is around Rs5,000 crore.
Steel Ministry sources said around 10% of the government equity could be diluted at the first instance and 15% thereafter.
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First Published: Mon, Dec 03 2007. 01 49 PM IST