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| Coal Min seeks Finance, Law Ministries' view on CIL divestment |
| Press Trust of India / New Delhi Sep 13, 2009, 14:44 IST |
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The Coal Ministry has approached the Department of Disinvestment for determining the value of Coal India's shares ahead of the PSU's proposed disinvestment.
The Coal Ministry has also sought the Law Ministry's opinion on a proposal for giving stock option to its employees and allotment of shares to those who have lost land for mining purposes, highly placed sources in the ministry said.
"The Coal Ministry is seeking views from the Department of Disinvestment on valuation of CIL's shares. It is also seeking legal opinion on the shares to be given to the company's employees and land-losers on the preferential basis," a senior ministry official told PTI.
Asked if the quantum of government's stake to be sold through the process of disinvestment has been ascertained, he said, "Coal India's (CIL) proposal regarding disinvestment has been received but a final figure is yet to be arrived at. Let us first see what does the two ministries suggest."
Besides seeking the two ministries views regarding disinvestment, the Coal Ministry has also written to the Public Enterprise Selection Board, regarding appointment of additional full-time directors on the coal major's board.
Coal India needs to have seven full-time directors on its board from the present four in order to be a 'Public Ltd', a pre-requiste for coming out with an IPO. It is registered as a 'Private Ltd' entity at present.
Last week, CIL Chairman P S Bhattacharyya had sought from the government delinking of shares to be given to its employees and land-losers from the equity to be channelised towards public offer.
Coal Minister Sriprakash Jaiswal had said that a maximum of 10 per cent of government's stake could be divested in the coal major in the first phase. However, another Coal Ministry official said that about 15 per cent of government's stake could be diluted in the firm.
While the officials did not specify any time-frame on the IPO, the company and the ministry is also in touch with market regulator Sebi on the proposal. Also, Bhattacharyya had met Disinvestment Secretary Sunil Mitra last month to discuss the stake-sale proposal.
It 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 government, which owns 100 per cent equity in the company, has already given its permission to slash the face value of the shares to Rs 10 from Rs 1,000, a move aimed at expanding the firm's equity base.
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.
Prior to the proposed stake-sale, the Coal Ministry would have to introduce a bill to amend the present Coal Mines Nationalisation Act.
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