SAIL losses to jump 40 pc

SAIL had announced a net loss of Rs 2,049 crore during the first nine months of 1999-2000. SAIL has also signed a memorandum of understanding (MoU) with the Ministry of Steel, as directed by the Cabinet, for the implementation of business restructuring with detailed milestones.

The financial restructuring included waiver of loans advanced to SAIL from Steel Development Fund (SDF) to the tune of Rs 5,073 crore and Rs 381 crore from the Government of India, apart from Government guarantee to raise Rs 3,000 crore from the market to fund its VRS and repayment of debt obligations.

SAIL has prepared a two-fold turnaround strategy entailing financial restructuring with the objective of improving financial health of the company and particularly to improve its ability to service debt and raise money for future projects.

The business restructuring aims at reducing both fixed and variable costs, improving techno-economic parameters by operational efficiency and taking such steps as asset restructuring and manpower rightsizing.

In a plan submitted to the Cabinet, SAIL has initiated a process of divestment in six non-core assets– power plants at Bokaro, Durgapur and Rourkela; two oxygen plants at Bhilai, Salem steel plant, Alloy steel plant, Visvesvaraya Iron and Steel Ltd at Bhadrawati and a fertiliser plant at Rourkela.

According to sources, SAIL is likely to mop up Rs 8,000 crore from the business restructuring over a period of four years. In case of disinvestment of Indian Iron and Steel Company (IISCO), sources said that SAIL would float a global tender soon inviting expression of interest from the interested parties.

SAIL has proposed to convert IISCO into a joint venture with the company having a minority shareholding, sources said.