Divestment in Mangalore Ore gets Cabinet approval

The Cabinet Committee on Economic Affairs (CCEA) today approved disinvestment in state-run Manganese Ore India Ltd (MOIL), in which the Centre would devolve 10 per cent equity, while Maharashtra and Madhya Pradesh governments would divest 5 per cent each.

“The initial public offering (IPO) will lead to Manganese Ore India Ltd (MOIL) listing its shares on the stock exchanges. Following the disinvestment, the Government of India shares in the company will come down to 71.57 per cent,” Home Minister P Chidambaram told reporters after the meeting.

The IPO would hit the bourses depending on market conditions, based on the directions of lead book-running managers, Chidambaram said.

The government currently holds 81.57 per cent, Maharashtra 9.62 per cent and Madhya Pradesh has 8.81 per cent equity in the Nagpur-based company.

“CCEA has also approved 5 per cent price discount to the employees of the company under employees reservation quota to encourage their becoming stakeholders in the company. CCEA has further decided to allow this 5 per cent price discount to retail investors as well to encourage the development of people-ownership,” said an official statement.

For the current financial year, the government has set a target of raising ' 40,000 crore from selling stake in some major profit-making PSUs like SAIL, Coal India, MMTC, BSNL, SJVN Ltd, Hindustan Copper and Engineers India.

However, it was not able to meet the disinvestment target of ' 25,000 crore for 2009-10 due to lukewarm response from the disinvestment of National Hydro Power Corporation, Oil India Ltd, Rural Electrification Corporation, National Thermal Power Corporation and National Mineral Development Corporation.

The government has plans to fund its several social sector developmental plans with the disinvestment proceeds, besides tiding over its fiscal deficit concerns. However, the ruling United Progressive Alliance faces stiff opposition from some of its major allies like DMK and Trinamool Congress on the issue.