Unions apprehensive about 5% stake sale in Neyveli Lignite

The coal ministry has conveyed to the department of disinvestment (DoD) the apprehensions of Neyveli Lignite's trade unions with regard to the proposed five per cent stake sale in the public sector undertaking (PSU) through offer for sale.

The development follows the ministry receiving a letter from DoD on five per cent stake sale in Neyveli Lignite Corporation (NLC). The government had earlier said the proposed stake sale in NLC was "not necessary" in the 2012-13 financial year, as this has to be completed only before July 2013.

The government, which currently holds 93.5 per cent in NLC, has been trying for some years to sell stake in the PSU. However, opposition from trade unions, as well as on the political front, has stalled its attempts. Recently, NLC invited bids from global firms to acquire coal assets abroad for providing fuel security to its thermal power plants.

The state-owned firm has proposals for growth in power generation capacity and is expanding its activities not only at Neyveli but in other parts of the country. It has entered into a joint venture with Uttar Pradesh to set up a 1,980 Mw power station at Ghatampur, near Kanpur.

NLC also has a proposal to establish a power plant with a capacity of 4,000 Mw at Sirkali in Tamil Nadu. It is also planning to bid for ultra mega power projects (UMPP) of 4,000 Mw under rate based competitive bidding.

The shares of the company closed at Rs 65.90 a scrip on the BSE on Thursday, a gain of 0.30 per cent from the previous close.