Coal India Ltd (CIL), which is actively pursuing the issue of disinvestment with the Centre, aims to raise Rs 6,000 crore through a stake sell of 10 per cent.
The modalities are yet to be decided. Sources said Partha S Bhattacharyya, the chairman of CIL, today called on the Union disinvestment secretary and discussed the issue.
“We are aiming to mop up Rs 6,000 crore through disinvestment of 10 per cent government equity. The proposal is being examined by the Centre,” a top official told Business Standard.
The Union coal ministry needs to first introduce a Bill to amend the existing Coal Mines (Nationalisation) Act of 1973.
The coal major expects the disinvestment process to be finalised within a year. It had set a tentative timeline of coming out with an initial public offer (IPO) by September 2010.
The first right of purchase of shares would be given to the company’s employees. The second option of buying CIL’s shares was for the people whose land was acquired by the coal major for various mining projects.
However, prior to the disinvestment process and IPO, the navratna coal major says it is dire need of a price hike to shore up its bottom line.
A clear picture on the issue of hike in coal prices is yet to emerge, even though the Union coal minister had assured that the matter would be discussed soon with the prime minister.
CIL had sought a 10 per cent hike in coal prices to offset the annual financial burden of about Rs 4,000 crore posed by the wage hike of over 433,000 employees and officers under the National Coal Wage Agreement (NCWA)-VIIII.
The last revision in prices by CIL was in December 2007, when prices of all grades of coal were hiked by 10 per cent. The NCWA was to be implemented with retrospective effect from July 2006 for the workers and November 2007 for the officers of CIL.
CIL’s net profit stood at Rs 96 crore in 2008-09, after it paid arrears worth Rs 7,856 crore to its employees and officers.
The wage hike had also rendered as many as 33 projects of CIL in the 11th Plan Period as commercially unviable. These projects were to add 28.4 million tonnes to CIL’s production, which was earlier projected at 520 million tonnes by the end of 2011-12.