The government is not considering a merger between Rashtriya Ispat Nigam Limited (RINL) and the Steel Authority of India Limited (SAIL) at this time, sources familiar with the matter told CNBC-TV18.

Instead, discussions are centred around a restructuring package aimed at ensuring the future viability of RINL.

The Ministry of Steel and the Ministry of Finance are actively engaged in conversations regarding the revival of the steelmaker, which is facing severe financial difficulties.

RINL, which operates a 7.5 million tonnes integrated steel plant in Visakhapatnam, Andhra Pradesh, reported a loss of ₹2,900 crore for FY23 and currently has total borrowings of ₹20,600 crore.

Although there had been earlier reports that a merger between RINL and SAIL was being discussed as a possible solution, Union Minister of State for Heavy Industries B Srinivas Varma clarified that this was one of the options under consideration, however, there were technical challenges given that SAIL is a limited company.

“We are discussing how to solve these issues,” the minister told a section of media in New Delhi on Friday.

The minister also pointed out that the employees of RINL are in favour of such a merger, citing insecurities after some staff were sent to other institutions on deputation.

Varma added that other options to ensure RINL’s survival were also being explored, including the sale of land parcels to NMDC to facilitate the setup of a pellet plant and seeking loans from SBI and other public sector banks. Furthermore, in light of new rules, RINL may need to participate in auctions to secure captive mines.