CIL gets shareholders nod for buyback of 10.89cr shares

The country's leading miner Coal India Ltd (CIL) on Friday said its shareholders have approved buyback of 10.89 crore shares worth Rs 3,650 crore.

In a BSE filing, CIL said its shareholders have given approval for buyback of equity shares of 10.89 crores at Rs 335 a share.

The approval for buyback of Rs 3,650 worth shares was sought through a postal ballot.

The Finance Ministry is pushing for buyback of shares by central public sector enterprises. This is being done for two purposes,  to generate cash for the government and help push up the valuation for any divestment.

In the last one year, CIL has seen depletion in its cash reserve by 18 per cent, or Rs 8,700 crore, to Rs 38,300 crore as on March 2016.

The government has set a disinvestment target of Rs 56,500 crore for the financial year 2016-17. Of this, Rs 36,000 crore is expected to come from minority stake sales.

CIL board will deliberate on cash outgo due to the buyback and its long-term investment plan to meet the Coal Ministry's goal of one billion tonne output by 2020.

The Centre also needs to bring down its stake in CIL below 75 per cent to adhere to the Securities and Exchange Board of India's norms. The deadline for ensuring this is August 2017.