New Delhi [India], October 14 (ANI): The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has given its in-principle approval to the demerger of Nagarnar Steel Plant (NSP) from National Minerals Development Corporation (NMDC) Ltd. and strategic disinvestment of the demerged company (NSP) by selling the Centre's stake in it to a strategic buyer.
According to an official release, NSP is a three million ton per annum Integrated Steel Plant being set up by NMDC at Nagarnar, Bastar District, Chhattisgarh in an area of 1,980 acres at a revised estimated cost of Rs 23,140 crore (as on July 14, 2020).
"As on date NMDC has invested Rs 17,186 crore on the project out of which Rs 16,662 crore is from NMDC's own funds and Rs 524 crore has been raised from bond market," it said.
With the approval, CCEA has amended its earlier decision taken on October 27, 2016, to disinvest Nagarnar Steel Plant as a unit of NMDC.
The release said that after the demerger, NSP shall be a separate company and the management of NMDC and NSP shall be accountable for their respective operations and financial performance.
"Shareholders of NMDC will also be shareholders of the demerged company (NSP) in the proportion of their shareholding. After the demerger, investors will have better visibility of the operations and cash flow of NMDC and NSP separately," it said.
The demerger will also be tax neutral from the point of view of capital gains,
"The CCEA has taken note that the process of demerger and disinvestment will be initiated in parallel and disinvestment of demerged company (NSP) is expected to be completed by September 2021," the release said.
NMDC is a listed CPSE under the Ministry of Steel and the Centre has 69.65 per cent shareholding in the company. (ANI)