Vizag Steel Plant Inks ₹900 Crore Working Capital Deal with JSPL

In a strategic move aimed at bolstering its financial position, the Rashtriya Ispat Nigam Ltd, popularly known as Vizag Steel Plant, has successfully negotiated a deal with Jindal Steel and Power Ltd (JSPL) for a working capital infusion of up to ₹900 crore. The agreement is designed to propel sales revenue, enhance monthly turnover, and mitigate losses for the steel plant.

This timely collaboration allows Vizag Steel Plant to procure essential raw materials and initiate consistent operations at Blast Furnace-3 (BF-3). The planned blowing-in for BF-3 is scheduled for December 30, with a targeted capacity of two lakh tonnes of hot metal per month, as confirmed by an official statement on Thursday.

Vizag Steel Plant's Chairman and Managing Director (CMD), Atul Bhatt, elaborated on the arrangement with JSPL during a meeting with trade unions. "The deal with JSPL will ensure the availability of approximately ₹800-900 crore for RINL in the form of working capital advance and raw materials necessary for the consistent operation of BF-3," stated Bhatt. As part of the agreement, RINL will be supplying around 90,000 tonnes of cast blooms every month from Steel Melting Shop-2 (SMS-2) to JSPL.

Bhatt emphasized that the collaboration with JSPL is anticipated to boost Vizag Steel Plant's revenue by around one lakh tonnes, even after fulfilling the committed quantity to JSPL. The CMD projected that this deal will elevate the monthly sales turnover to approximately ₹500 crore and result in a reduction of losses by about ₹100 crore per month.

In light of this significant development, Bhatt appealed to the trade unions to increase production and sought the collective support of the entire workforce to ensure sustained growth and profitability for the steel plant.

Addressing queries raised by the trade unions, Bhatt assured them that the steel plant's management is implementing optimal strategies for its sustainability and profitability. The activation of BF-3 is positioned as a strategic initiative to optimize production capabilities and contribute to the overall enhancement of the steel plant's financial outlook.

HBL