New Delhi, Jan 17 (PTI) The Union Cabinet has approved a Rs 11,440 crore revival package for Rashtriya Ispat Nigam Ltd to help the struggling steelmaker tide over its financial woes, Union Steel Minister HD Kumaraswamy said on Friday.

He also said that the privatisation issue of the steel-making entity does not arise.

"The Visakhapatnam Steel Plant has a special place in the hearts and minds of the people of Andhra Pradesh. During yesterday’s Cabinet meeting, it was decided to provide equity support of over Rs 10,000 crore for the plant. This has been done understanding the importance of the steel sector in building an Aatmanirbhar Bharat," Prime Minister Narendra Modi said in a post on X. In January 2021, the Cabinet Committee on Economic Affairs (CCEA) approved a 100 per cent disinvestment of a government stake in debt-laden Rashtriya Ispat Nigam Ltd (RINL), under the Ministry of Steel, amid poor financial and operational progress.

In a media briefing in the national capital, Kumaraswamy said the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, on Thursday approved the revival plan for RINL for Rs 11,440 crore.

"Privatisation issue will not arise in RINL (after capital infusion). That is why actually we took the decision, convincing our Prime Minister. The feeling of Andhra Pradesh brothers and sisters on that basis, we convinced our Prime Minister, We are actually honouring the Andhra Pradesh citizens," Kumaraswamy said, replying to a question related to the government's plan to privatise RINL.

The package became possible after positive support from the Prime Minister, Kumaraswamy said, adding that he had been taking several review meetings on exploring possible options for the survival of RINL.

"I met the Finance Minister several times and bankers. However, finally, today a package has been announced." Sharing his vision for RINL's future, Kumaraswamy said he has taken the challenge to make RINL's Visakhapatnam Steel Plant the top steel producer in India.

"We are going to successfully show that Vishakhapatnam plant will be the number one plant in India in the steel production. That is my challenge, I have taken," he said.

RINL's 7.5 million tonne steel plant at Visakhapatnam in Andhra Pradesh has been facing severe financial and operational issues for the past few years. Two of the three blast furnaces (BF) were closed till October 2024, when the second BF was made operationalised after nearly 4-6 months. The overall dues of RINL have gone above Rs 35,000 crore.

As per the minister, in July-August this year, all three furnaces be operational with over 92 per cent production.

On the reasons behind RINL's situation, Kumaraswamy the company was running smoothly till it had a capacity of 3 MTPA.

"It (issue) started when they (RINL management) decided to expand from 3 million tonnes to 6.3 million ton in 2014-15, they have raised their loan of Rs 11,000 crores from different banks with the interest of 13 per cent.

"They had no captive mining to run the plant. They have to purchase the raw material (8:36) from the open market. Then again in 2016-17, they raised the plan to expand to 7.3 MT...Now, actually, the downfall of RINL started after going for this expansion," he said.

Kumaraswamy also said his ministry is also working to get some iron ore mines for RINL for captive usage in Odisha.

Meanwhile, in a statement, Union Minister of Railways Ashwini Vaishnaw with the revival package many of the historical legacy problems that RINL used to face will be resolved. Simultaneously a lot of effort is going to be put into securing the raw material for RINL and the modernisation of the plant.

In this overall package of Rs 11,440 crore, a fresh equity infusion of Rs 10,300 crore is there and the conversion of working capital loan into preferred share capital of Rs 1,140 crore. With this, all the employees of RINL as well as all the people connected with the economic activities of RINL will be immensely benefited and Andhra Pradesh will have a major steel plant revived in the coming days, he said. PTI ABI ANZ ABI BAL BAL