CHENNAI: Loss making public sector enterprise Salem Steel Plant (SSP), a unit of Steel Authority of India Ltd (SAIL), will soon be sold in an e-auction, according to a BSE filing on Tuesday.
SSP, which pioneered the supply of wider width stainless steel sheets and coils in India, has been making losses for the last five years despite SAIL investing 2,200 crore in the Salem-unit for mordernisation and expansion.
India's largest steel maker SAIL on Tuesday disclosed to Sebi that the Union Ministry of Steel has communicated with it the "in-principle" approval of the Cabinet Committee on Ecomonic Affairs (CCEA) for strategic disinvestment of three units - namely the Bhadrawati, Salem and Durgapur alloy steel plants units of state-owned SAIL.
"Disinvestment of these units shall be to strategic buyers to be identified through two stage auction process, as recommended by the core group of secretaries on disinvestment," said the BSE filing.
Jindal Stainless is likely to bid for SSP as other likely suitors like Tata Steel-Unisor stay away. Started in 1970, the landmark plant in Salem employs more than 2,000 workers and has seen its losses more than triple to Rs 349 crore in 2015-16 from Rs 100 crore in 2011-12.
SSP accounted for 8% (Rs 349 crore loss) of SAIL's net loss of Rs 4,137 crore in the last fiscal. The Salem plant has a capacity to prodice 70,000 tonnes per annum in cold rolling mills and 3.64 lakh tonnes a year in hot rolling mills.
This move has been taken based on Niti Aayog's recommendations to make public-sector units more profitable. Earlier this month, Union Minister of Heavy Industries and Public Enterprises Anand Geete told TOI that "the public can be reassured that the disinvestment in government PSUs will not exceed 5%."