Cabinet to consider SAIL recast

The package also envisages a Government guarantee without guarantee fee for loan and interest thereon of Rs 1,500 crore to be raised from the market primarily for meeting repayment obligation on past loans during 1999-2000.

The Union Cabinet had earlier cleared SAIL proposal for raising Rs 500 crore from the market to meet debt obligations. It also sought Government guarantee for the SAIL, which is loaded with excess manpower of over 70,000, to raise Rs 1,500 crore without guarantee fee and interest subsidy on loan for financing reduction in manpower through voluntary retirement.

The Steel Ministry, in its note, also asked for a provision of grant of Rs 100 crore per year for three years to Indian Iron and Steel Company IISCO for VRS and sustaining its operations until implementation of its revival package. The financial and business restructuring package also sought Government approval for SAIL to have minority shareholding in any joint venture JV contemplated for revival of IISCO, sources said.