Divest only 3.56 percent central stake in Neyveli: Jayalalithaa

Tamil Nadu Chief Minister J. Jayalalithaa Saturday told Prime Minister Manmohan Singh that it will be enough to divest only 3.56 percent of the central government's stake in Neyveli Lignite Corporation Ltd (NLC) as 6.44 percent is already held by the public.

Jayalalithaa also said a state government team would meet the officials of the central government and Securities and Exchange Board of India (SEBI) in Mumbai Monday to finalise the modalities of the state undertakings acquisition of the central stake in NLC.

Replying to the prime minister's letter of Friday, she said: "I had already indicated in my letter dated July 7, that while the state PSUs (public sector undertakings) would be prepared to buy the entire 5 percent of the equity of NLC proposed to be disinvested, since 6.44 percent of equity is already with the public, it would be adequate if only 3.56 percent is offered for sale to meet the regulatory norm of 10 percent public holding."

Jayalalithaa told him that that she expects the details of structuring and executing of the transaction will be finalised at the Monday meeting to enable early resolution of the labour unrest at NLC.

She said noted that a state government team held discussions with the secretary, department of disinvestment, in New Delhi Wednesday.

"The team had extensive discussions on the various modalities of the disinvestment including identification of the state PSUs which are QIBs (qualified institutional buyers) and eligible to participate in an institutional placement programme (IPP)..

"..the appropriate manner of drafting the eligibility criteria in the offer document to ensure that the disinvestment is carried out in favour of these entities; the pricing formula and the time line for effecting the transaction," she said.

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

Political parties in the state have opposed the central government's decision to divest five percent stake in NLC to meet SEBI norms of having a minimum of 10 percent public shareholding.

Around 27,000 NLC workers are on strike since July 3 protesting the decision.