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| CIL among top contenders for Maharatna status |
| BS Reporter / Bhubaneswar Aug 28, 2009, 18:23 IST |
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State run Coal India (CIL) is one of the top contenders among the navratna firms in the country for award of the Maharatna status by the Centre.
CIL has already advocated to the Centre for award of the Maharatna status. It may be noted that as many as 17 navratna companies in the country are in the reckoning for the Maharatna status.
The award of the Maharatna status would mean that the board of directors of CIL can approve investment up to Rs 5,000 crore without requiring the approval of the government.
Being a navratna firm, the coal major was entitled to clear investment proposals worth Rs 1,000 crore without the nod of the government.
“CIL has already advocated to the Centre for award of the Maharatna status and we are among the top five contenders for this status. Following the grant of the Mahartana status, CIL can clear investment proposals worth Rs 5,000 crore and this would help us in our acquisition of overseas coal assets which involve high value transactions”, a highly placed CIL official told Business Standard.
Stating that it would be in the best interest of the Centre to confer the Maharatna status to CIL, he said, the process of award of the Maharatna status to CIL needs to be expedited.
“There is not much of coal resources for CIL within the country to enable it to meet the burgeoning coal demand in the domestic market. We are not getting adequate number of coal blocks as these are being awarded for captive production. The only option left is to pick up stakes in coal assets abroad for which we need greater financial autonomy,” he added.
He pointed out that for award of the Maharatna status, the government was contemplating some eligibility criteria prominent among which included the listing of a navratna firm and more number of independent directors on its board.
CIL had set a tentative target of hitting the capital markets by September 2010. The coal PSU (public sector undertaking) which won the navratna status in October 2008 was to get listed by October 2011.
One-third of CIL's board of directors were independent directors and the coal major was aiming to raise the strength of independent directors to one-half before listing.
However, prior to listing, CIL had sought a moderate increase in coal prices to shore up its bottomline which was impacted by the implementation of the National Coal Wage Agreement (NCWA)- VIII.
By the end of 2008-09, the retained earnings of CIL stood at Rs 300 crore on a turnover of Rs 45,000 crore.
NCWA-VIII which had raised the salaries of over four lakh employees of CIL posed a financial burden of Rs 4,000 crore per annum to the company.
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