RINL stake sell-off likely to get delayed

The governments plans to divest stake in Rashtriya Ispat Nigam Ltd may get delayed as the steel behemoth has to work on a number of issues before it can list on the bourses.

The governments plans to divest stake in Rashtriya Ispat Nigam Ltd (RINL) may get delayed as the steel behemoth has to work on a number of issues before it can list on the bourses.

RINLs disinvestment will take place in the current fiscal but its timing will have to be decided based on how fast the company can complete some crucial activities. It is unlikely to be listed anytime before the third quarter, a senior government official said.

Before being able to launch its public offer,RINL will have to amend its Articles of Association to become a public limited company. It is currently a private limited company. Further,it will also have to appoint the requisite number of independent directors as well as complete its capital restructuring process.

RINL has also begun work on its restructuring its equity base,currently as high as Rs 8,000 crore. The company plans to reduce the base to Rs 1,000 crore and transfer the balance Rs 7,000 crore to reserves so that the net worth remains the same.

The state run steel company is one of the 10-odd public sector firms that the government is planning to sell a part of its stake in,as it tries to garner Rs 40,000 crore from disinvestment receipts in the current fiscal.

The government is looking at disinvesting 10 per cent of its stake in the firm.

The government gave RINL a navratna tag in 2010,provided that it list on the bourses in the next to year.