The Government of India is going to provide one-time support of Rs 200 crore for settling term loans for financial restructuring of Hindustan Steel Works Construction Limited (HSCL) and the government will also bear the contingent liability of Rs 110 crore, as per an official release by the steel ministry.
On May 25, the Union Cabinet, chaired by Prime Minister Narendra Modi has given its approval for the financial restructuring. It has also approved takeover of HSCL by National Buildings Construction Corporation Limited (NBCC), a Central Public Sector Enterprise under the Ministry of Urban Development.
NBCC and HSCL are Government of India enterprises with similar lines of business activities. The decision will benefit in terms of economies of scale for NBCC and would assist in better manpower utilisation. NBCC and HSCL will benefit from each other’s resources and expertise. HSCL will be able to fulfill its commitments of execution of projects and orders.
The existing paid-up equity capital of HSCL is Rs 117.1 crore. Under the proposal, the Government of India Non Plan Loan and Plan Loan along with accumulated interest thereon and outstanding guarantee fee worth Rs 1,502.2 crore will be converted into equity and equity capital of the company will be raised to that extent. The paid-up equity capital of the company will become Rs 1,619.3 crore.