Lenders close to finalising recast package for Vizag's RINL
State Bank of India (SBI) are in the final stages of working out a restructuring package for Vizag's Rashtriya Ispat Nigam (RINL), which includes a reduction in interest rates, reducing some contractual staff, and raising production capacity at the government-owned steelmaker that was defunct until recently.
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The account has now been regularised after repayment of loans up to March 2025 following equity infusion into the company by the government earlier this fiscal year, providing banks the support needed to turn around the company, people familiar with the plans said.
«The restructuring plan drawn up by SBI Capital Markets envisages increasing the steel plant's capacity, reducing contractual staff and bringing down loan costs to make the debt sustainable,» said a person aware of the details. «The government equity infusion has made the account standard, which is the first step. Banks will now work in a consortium to reduce interest rates from the current 14% to 15%, by reducing margins to bring it down to about 9%.»
Brink of NPA
RINL manages a 7.5 million tonne steel plant in Vizag in Andhra Pradesh. It was on the verge of being classified as an NPA in June last year when it had payment dues past 60 days. Any delay in payment attracts higher interest rate and penalties from banks due to heightened risk of default, as a result RINL was paying a
