Steel workers' body SWFI opposes govt nod to sale of shares of PSUs in Neelachal Ispat

Steel workers' body SWFI on Wednesday condemned the government's decision to divest equity shares of six PSUs, including MMTC, in Neelachal Ispat Nigam Ltd (NINL). The Cabinet on Wedesday approved divestment of some shares of MMTC, National Mineral Development Corporation (NMDC), Bharat Heavy Electrical Ltd (BHEL), Odisha Mining Corporation, Odisha Investment Corporation and MECON in Neelachal Ispat.

"We strongly condemn the decision," Steel Workers Federation of India (SWFI) Working President P K Das said while reacting to the development. He said his organisation opposes sale of any public sector unit be it steel or any other sector.

Referring to the stressed steel assets which had to undergo NCLT proceedings, he said it must to be noted that no private sector could run their steel plant well. "In private sector, Bhushan Steel plant was sold after becoming bankrupt. Adhunik Steel is closed. Today hundreds of steel plants are closed in private sector, but public sector PSUs including NMDC, RINL are doing well and government wants to sell which is doing well," he said and most of the "entities in private sector are sick, bankrupt or sold."

He further said that SWFI workers will go on strike if the government considers a decision like today's with RINL and NMDC. The government must note one thing that there are no buyers in the market, no one wants to invest any amount due to the financial crunch in market.

In his reaction, Jayanta Roy who is senior vice-president and group head (corporate sector ratings) at ICRA, said. " The proposed sale would have a number of attractions to the strategic investor in the form of a captive iron ore mine which is under development, and a locational advantage of being in Odisha and in proximity to ports. On the other hand, the company may benefit in terms of private sector efficiencies if an experienced player is brought in." NINL is a joint venture company, in which four central PSUs -- MMTC, National Mineral Development Corporation (NMDC), Bharat Heavy Electricals Ltd (BHEL) and MECON -- and two Odisha government companies IPICOL and Odisha Mining Corporation (OMC) are shareholders.

MMTC holds 49.78 per cent share in NINL, followed by OMC (20.47 per cent), IPICOL (12 per cent), NMDC (10.10 per cent), while MECON and BHEL hold 0.68 per cent each.

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