Indian state steel company to sell non-core assets
The Ministry of Steel instructed India's largest state-owned steel company (SAIL) to identify unused assets and detailed plans to monetize such assets. The state-owned company has also been asked to sell its investments in joint ventures and steel processing plants.
This move aims to allow the company to focus on its core business and become a pure steel and mining company.
“SAIL has been asked to expedite the process of identifying idle assets and decommissioned enterprises in terms of their monetization,” says a recent memo from the Ministry of Steel to the Cabinet.
In the first half of the year, SAIL announced huge losses associated with the coronavirus pandemic. Several of its factories have been completely shut down, and a number of enterprises will no longer be possible to restart.
However, in August of this year, SAIL sold 1.43 million tons of steel, which is 35% more than in the corresponding month of last year.
According to its 2018-19 Annual Report, SAIL has already initiated actions to close or exit some joint ventures and subsidiaries that are either not working or not working.
SAIL's idle assets may include its Visveswaraya Steel Works (VISP) in Bhadravati, which ceased production more than a couple of years ago. Along with VISP, in October 2016 the government gave its “principled” approval for a strategic divestiture in two other divisions, the Salem Steel Works (SSP) in Salem and the Alloy Steel Works (ASP) in Durgapur.