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| CIL may hire merchant banker to advise on divestment |
| Press Trust of India / New Delhi Nov 02, 2009, 15:01 IST |
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The country's largest coal miner, Coal India (CIL), is likely to appoint a merchant banker soon to advise it on the proposed disinvestment in the company.
The government may offload a maximum of 10 per cent of its stake in the state-run firm. Currently, its holdings in CIL stands at 100 per cent.
"CIL may appoint a merchant banker soon to advise it on the proposed disinvestment," a top coal ministry official said.
The coal major had recently held meetings with two such bankers who made their presentations.
The official, however, clarified that it should not be confused with an investment banker, which will be appointed after the disinvestment process in the company starts.
"The investment banker to oversee the stake sale process will be appointed by the Department of Disinvestment after the share sale in the company gets Cabinet nod," he added.
The CIL spokesperson could not be reached for comments.
The Coal Ministry and its PSU, Coal India, is in talks with the Department of Disinvestment to "fine tune" the draft on the proposed stake sale.
"We are in discussions with the Department of Disinvestment for fine tuning the proposal. The last meeting in this regard was held on October 16," another coal ministry official said.
Asked if the quantum of proposed disinvestment has been ascertained, the official said: "That will be discussed towards the end. As of now, we are working to comply with certain regulatory formalities which are necessary prior to the disinvestment."
It is learnt that the Department of Disinvestment had last month sought clarification from the Coal Ministry on the proposed disinvestment.
Coal Minister Sriprakash Jaiswal had said that the government could offload a maximum of 10 per cent of its stake in CIL. The firm is not going to raise fresh equity.
However, according to a senior coal ministry official, the government may well sell 15 per cent stake in CIL on account of the proposed stock options to employees and compensation to be given to people from whom land is acquired for mining purposes.
In September, the Coal Ministry had approached the Disinvestment Department for determining the value of CIL shares ahead of the PSU's proposed disinvestment and also sought the Law Ministry's opinion on certain contents of the plan.
The company was given Navratna status last year and was asked to get listed before September 2011. But, industry observers anticipate listing to happen in an year's time.
The company has a paid-up equity capital of about Rs 6,316 crore. It clocked a pre-tax profit of Rs 8,738.46 crore in the last fiscal.
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