The government has decided to give a push to its strategic disinvestment plan within the current fiscal year itself by clearing sale of 100 per cent stake in three special steel producing units of Steel Authority of India Ltd. (SAIL), including Salem Steel and Alloy Steel Plant.
Sources said that the Prime Minister's Office has accorded its approval to the sale and Department of Investment and Public Asset Management (DIPAM) will now start the process of appointment of transaction advisors to conclude the deal quickly.
The three units of SAIL identified for strategic disinvestment includes Visveswaraya Iron and Steel Plant, Bhadravati, Karnataka, Salem Steel Plant, Tamil Nadu, and Alloy Steel Plant, Durgapur, West Bengal.
All these units of the steel giant have been consistently making losses and sale has been considered the best option.
The disinvestment of these units will be to strategic buyers to be identified through a two-stage auction process. Sources said that with the steel market on the upswing again, the units could realise good value.
Companies like JSW Steel, Vedanta, Tata Steel, ArcelorMittal have been in a look-out for new assets.
However, the likely amount to be mobilised could not immediately ascertained.
Visvesvaraya Iron and Steel Ltd, Bhadrawati, which was taken over by SAIL in 1997, produces alloy steel and pig iron. It was started by M. Visvesvaraya, a diwan of Krishnaraja Wodeyar and the then ruler of Mysore, in 1923 under the name of Mysore Iron Works.
Salem Steel is also an old unit with SAIL that produced high grade stainless steel with utensils branded in its name being household name earlier.The government wants to conclude the deal for SAIL units at the earliest so the fund mobilised from the deal helps it in reaching closer to disinvestment target of Rs 80,000 crore for FY19. So far, the disinvestment proceeds have reached closer to Rs 50,000-crore mark.