Meet today to finalise details of NLC divestment

Tamil Nadu is expecting the details of structuring and execution of the transaction related to the stake dilution of Neyveli Lignite Corporation Ltd (NLC) at a meeting to be held between the state officials, Union government and Securities and Exchange Board of India (Sebi) on July 15, said chief minister J Jayalalithaa.

"I expect the details of structuring and execution of the transaction will be finalised during the scheduled meeting. This would be a positive development which I'm confident would enable an early resolution of the labour unrest in Neyveli," she said in a letter to Prime Minister Manmohan Singh.

The state has nominated the principal secretary, finance department as the nodal officer, as requested by the Centre, according to Jayalalithaa.

She had deputed a team of state officers comprising principal secretary, finance, principal secretary, planning and development and joint secretary, industries, to New Delhi for discussions with the secretary, department of disinvestment, on July 10, at the invitation of the secretary of disinvestment.

The team had extensive discussions on the various modalities of the disinvestment including identification of the state PSUs which are qualified institutional buyers (QIBs) and eligible to participate in an institutional placement programme (IPP), the appropriate manner of drafting the eligibility criteria in the offer document to ensure disinvestment is carried out in favour of these entities, the pricing formula and the time line for effecting the transaction.

The total quantum of disinvestment to be carried out was also discussed by the officials in the light of the regulatory requirements.

"I had already indicated in my letter dated July 7, that while the state PSUs would be prepared to buy the entire five per cent of the equity of NLC proposed to be disinvested, since 6.44 per cent of equity is already with the public, it would be adequate if only 3.56 per cent is offered for sale to meet the regulatory norm of 10 per cent public holding," she said.