With a view of fetching better value through initial public offering (IPO), State-owned Rashtriya Ispat Nigam (RINL), has decided to initiate a slew of financial restructuring measures and merge a subsidiary. The company has decided to reduce equity capital base of considerably by transferring 40-60 per cent into reserves.
Further, decision of early redemption of an amount of Rs 1,632 crore of seven per cent of preference share capital has also been taken by the Steel Ministry. At the same time, Eastern Investment (EIL), a subsidiary of the company, would be merged with the company by swapping the shares of company and EIL through cash-less transaction.
RINL’s IPO has been a failure atleast thrice this year due to various reasons including a fire that broke out in its lone facility at Vizag. However, the one planned in October was cancelled due to difference of opinion on valuations between the government and Book Running Lead Managers (BRLMs) of the issue.
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