Vizag Steel Plant misses payment, lenders look for cover

Government-owned Rashtriya Ispat Nigam Ltd (RINL) missed a payment to lenders due to financial stress, raising alarms among stakeholders. With Rs 14,000 crore in term loans and Rs 15,000 crore in fund-based limits, the company defaulted on a Rs 410 crore payment on June 30. The State Bank of India is the major lender, followed by Canara Bank and Indian Bank. Some banks have made precautionary provisions of 15% of their exposure. The Reserve Bank of India mandated that banks sign an inter creditor agreement to take immediate action. The company is operating at a low capacity of 30% and faces additional issues due to unpaid customer invoices. The government may sell non-core assets to reduce debt. Minister HD Kumaraswamy assured assistance to increase production capacity.