The issues related to pay scale revision and pension of NINL employees will be decided by the new management post disinvestment, Minister of State for Finance Bhagwat Kishanrao Karad said on Tuesday.

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The government had last month approved the sale of loss-making Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products (TSLP) Ltd for Rs 12,100 crore.

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The bid by TSLP was double the reserve price of Rs 5,616.97 crore set by the government based on the valuation of the transaction adviser and asset valuer.

In a written reply to the Rajya Sabha, Karad said the strategic disinvestment of NINL is on a going concern basis and the employees shall continue to be employees of NINL in terms of the agreed Share Purchase Agreement (SPA) to be signed with TSLP.

The government had on January 31 said that Letter of Intent (LoI) "is being issued to TSLP inviting them to sign the SPA".

"The issues related to pay scale revision, DPC (duties, power and conditions of service), pension etc will be decided by the new management post disinvestment as per their HR policy," Karad said.

As per the agreement, the employees cannot be retrenched for one year from the closing date of the transaction.

However, if TSLP offers an option to the employees to voluntarily retire within one year, the same shall not be less favourable than the terms of the voluntary retirement scheme provided by the Department of Public Enterprises to the company, he added.

NINL is a joint venture of 4 CPSEs -- MMTC, NMDC, BHEL, MECON and 2 Odisha government PSUs -- OMC and IPICOL.

NINL's 1.1 million tonnes a year capacity steel plant at Kalinganagar in Odisha was shut in March 2020 due to continued losses.