Steel Min may restructure four PSUs

In an initiative to optimise the functioning of four of its PSUs -- MSTC, FSNL, KIOCL and HSCL -- the steel ministry is considering restructuring the companies and has appointed a committee to suggest ways for it.

"We have appointed a committee to examine the structure and functioning of four companies and make recommendations regarding their re-organisation, merger with other companies or other structural re-organisation as warranted," Steel Secretary P K Rastogi told PTI.

The committee, headed by the ex-CMD of Kudremukh Iron Ore Company Ltd, P Ganesan, and comprising former CMD of Manganese Ore India Ltd, K L Mehrotra as a member, has been asked to submit its report within two months, he added.

The steel ministry is of the view that the proposed restructuring will enhance the efficiency and profitability of these companies, Rastogi said.

At present, KIOCL and HSCL are facing tough times. While the former's export-oriented unit in Karnataka has completely shut production for last few months in view of lower iron ore sales realisation, the latter does not have many orders for constructing steel plants.

Ferro Scrap Nigam and MSTC, however, have been doing normal business, but the ministry intends to widen their business horizon.

Besides looking for structural re-arrangements in MSTC, FSNL and KIOCL, the Steel Ministry is pushing for revival of Hindustan Steelworks Construction Ltd, whose net worth has slipped into negative.

The company's revival plan has already been approved by the Board of Reconstruction of Public Sector Enterprises. It has also given its go-ahead to the ministry's proposal for writing off HSCL's loans over Rs 1,000 crore (Rs 10 billion) along with accrued interest.

The proposal for capital infusion of Rs 518 crore (Rs 5.18 billion) to HSCL for repaying bank loans taken between 2002 and 2005 in course of giving VRS to its employees has also been cleared.

The ministry has circulated a draft cabinet note to ministries concerned for the proposed restructuring of the company. After receiving clearances, the proposal would be placed before the cabinet for approval.