This PSU Will Sell Their Prime Land For Rs 1000 Crore To Pay Debt; Total Debt: Rs 19,000 Crore
The latest reports revealed that the state-owned Rashtriya Ispat Nigam Ltd(RINL) is planning to garner Rs 1,000 crore from the sale of its 22.19-acre prime land.
Selling Of Prime Land
The referred land is located in the heart of Visakhapatnam city which is also known to be a popular tourist destination in Andhra Pradesh.
In the same regard, the state-run construction company NBCC had announced signing an MoU with Rashtriya Ispat Nigam Ltd (RINL) on Thursday.
With this move, they are planning for the redevelopment and monetization of its 22.19 acres of land in Visakhapatnam.
Raised Money Will Be Utilized To Pay Back
Further, “the company expects to get around Rs 1,000 crore as the market price of land is around Rs 1 lakh per square yard. The amount raised would be utilized to pay back a portion of the debt of the company,” according to the sources.
With that said, the company had a net debt of Rs 19,592 crore in the financial year 2018-19, as per the data available on RINL’s website.
If we consider the company’s performance, without any captives, the iron ore mine produces over 19,000 tonnes of hot metal per day with the help of its three fully operational blast furnaces at the plant.
It is noteworthy here that the per tonne steel production cost of a company with captive iron ore and coking mines is less compared to a steelmaker buying raw materials from the open market, according to an expert.
What Is Next?
The said land is at Maddilapalem which is a prime location situated about 3-4 km from the beach, said the source while sharing the details with respect to the land parcel.
In addition to that, the site is about 2 km from NH-16 which also connects Howrah in West Bengal to Chennai in Tamil Nadu passes.
On top of that, this land is in close proximity to tourist attractions such as the zoo, Simhachalam temple, stadium etc.
So far, the value of the project is expected to be ascertained once the preparation and finalization of a Detailed Project Report (DPR).
NBCC plans to conduct the DPR and further submit it to RINL.
Also, the redevelopment and monetization would be undertaken on a self-sustainable model.