DoD to consider TN govt proposal to buy Neyveli Lignite stake

The disinvestment department will this week discuss the Tamil Nadu government's proposal to buy a 5% stake from the Centre in Neyveli Lignite, where a strike by workers against disinvestment entered its seventh day today.

"The Department of Disinvestment (DoD) has called a meeting on July 11 to deliberate modalities for purchase of shares by the Tamil Nadu government's PSUs," Neyveli Lignite (NLC) Chairman and Managing Director B Surender Mohan said.

The DoD had earlier asked the Tamil Nadu government to appoint a senior officer to discuss its proposal for buying the Centre's stake in NLC with the finance ministry.

One representative each from the Tamil Nadu government, the coal ministry and NLC are among those who will participate in the meeting, he said.

"We have been informally informed about the meeting. However, a written communication on the same will reach us positively by tomorrow," Mohan said.

Defying a Madras High Court order, about 30,000 NLC workers, including 13,000 contractual employees, have been on strike since July 3, protesting the Centre's decision to disinvest a stake in the PSU.

"There is no impact as our officers are still working," Mohan said when asked if power generation had been affected.

SEBI has already given its consent to the TN government's proposal to buy the stake, provided the acquisition is made by a qualified state entity.

"I have asked the TN chief secretary to depute a senior officer to discuss the matter with senior officials of Sebi as well as other government departments," disinvestment secretary Ravi Mathur had said.

Discussions need to be held on the amount of shares to be sold to the state and the number of PSUs that may participate in the process, he had said, adding that the sale of a 5% stake may yield about Rs 400 crore to Rs 500 crore.

The pricing of shares to be alloted to the various undertakings has also to be decided, he had said.

Moreover, the specified state PSUs should be declared as qualified institutional buyers, Mathur had added.

The NLC stake sale has been proposed to meet minimum public shareholding norms. Sebi has set an August 8, 2013, deadline for all listed central PSUs to have a minimum 10% public shareholding.

TN Chief Minister Jayalalithaa had written to Prime Minister Manmohan Singh last month, saying her state was willing to buy the stake being divested by the Centre.

Finance Minister P Chidambaram had earlier said the Centre would consider the TN government's offer and sought to assuage employees' concerns, saying there would be no change in management or staff policies.