CIL okays BCCL liability into prefrential shares

Board has approved conversion of liabilities worth Rs 2,539 crore of BCCL preferential shares

State-owned Coal India (CIL) today said its board has approved conversion of liabilities worth Rs 2,539 crore of Bharat Coking Coal Ltd (BCCL) into preferential shares.

"The board of directors of the company (CIL)...Has approved to convert the loan and Current Account Balance granted to BCCL, its 100% subsidiary, aggregating to Rs 2,539 crore into 5% non-convertible, redeemable cumulative preference shares," CIL said in a filing to BSE.

The decision was taken at the company's board meeting held today.

CIL further said in order to facilitate this, the board has approved to amend the Memorandum of Association & Articles of Association of BCCL.

"This is however subject to the approval of shareholders of BCCL," the statement added.

Dhanbad-based BCCL had earlier said that it has come out of the Board for Industrial and Financial Reconstruction (BIFR). The coal firm was loss-making and eventually referred to the BIFR.

BCCL, the only producer of prime coking coal in the country, was previously referred as a perennially sick undertaking. The company was de-listed from the list of sick industries, after turning net worth positive.

BCCL meets almost 50% of the total prime coking coal requirement of the integrated steel sector. It was incorporated to operate coking coal mines operating in the Jharia & Raniganj Coalfields.