Salem Steel Plant in Tamil Nadu and the Visesvaraya Iron and Steel Plant in Karnataka, both possessed by SAIL, are among the organizations distinguished by Narendra Modi government for divestment. The point is to make the two misfortune making units beneficial.
The milestone plant in Salem was laid out in 1970 and utilizes more than 2,000 individuals. The plant has been making constant misfortunes. Its misfortunes have expanded to Rs. 349 crore in 2015-16 from almost Rs. 100 crore in 2011-12.
The arrangement to privatize jindal Steel plant has been gone against by every one of the ideological groups in Tamil Nadu. The Tamil Nadu government has said it wouldn't permit any privatization in that frame of mind, in the midst of dissent by the associations.
It is dependably discovered that Jindal Stainless is enthusiastic about getting stakes in the public area organization during the disinvestment work out. Nonetheless, authorities are wary in recognizing it. "We have not concluded anything on the issue of purchasing stake in SAIL's Salem plant. The organization generally assesses such choices according to the overall business situation," a representative of Jindal Stainless said.
A SAIL official declined to remark on the issue. This isn't whenever the Government first is attempting to privatize the Salem Steel Plant. A comparative endeavor a long time back fizzled both for political and key reasons.
In 2003, 51 percent of controlling stake of SAIL in Salem Steel Plant was available to be purchased and there were at first two bidders for the stake — the Tata Steel-Unisor consolidate and Jindal Strips.
Afterward, Tata Steel-Unisor took out saying it saw no essential sense in the arrangement, making Jindal Strips the sole bidder. Yet, the Jindal Strips bargain additionally didn't go through because of conflict over the deal cost. Specialists express that with the mounting misfortunes of the Salem Steel plant, estimating of the arrangement would be the key.
"Last time, SAIL needed to encash on the Salem plant's image generosity. Notwithstanding, the worth couldn't be acknowledged around then. A similar issue would continue now also," Professor Kamal Ghosh Ray, a specialist on consolidations and acquisitions, said.
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