Divestment in CIL likely this month, says Jaiswal

FE Bureau Posted online: Friday, Aug 02, 2013

New Delhi : Coal minister Sriprakash Jaiswal on Thursday reiterated that the government plans to go ahead with its proposed 5% stake sale in Coal India this month, which is expected to fetch around R10,000 crore to the exchequer. The minister said the agreement was reached after major trade unions accepted the proposal to reduce the quantum of stake sale in the company.

"Coal India disinvestment may hit the market in August as three of its five major trade unions have given their consent to proceed with a 5% stake sale in the PSU," Jaiswal told reporters.

Although the trade unions are non-committal on having reached any such agreement, Jaiswal said three major unions have come round to the government's proposal and assured that they will convince the remaining two. Besides, the coal ministry will again hold a meeting with the unions on August 5 to deliberate on some other issues.

In a press conference on Wednesday, finance minister P Chidambaram said, "I sincerely hope that the ministry of coal and the trade unions can arrive at an agreement." He further added that every rupee raised through disinvestment in CIL will be ploughed back as additional capital into PSU banks.

The government's original plan was to sell 10% stake in CIL, to raise R20,000 crore, but the proposal met stiff resistance from trade unions, which threatened to go on strike. After consultations with unions, the government has now decided to sell only 5% on the open market, said Jaiswal, adding that for the remaining 5%, the government will devise some other mechanism.

CIL employees had earlier threatened to go on strike if the government went ahead with a 10% stake sale in the PSU major. The government currently holds 90% stake in the coal major, valued at R1,88,227 crore. CIL got listed on the bourses in 2010 through the country's biggest-ever initial public offering, in which the government raised R15,199 crore by selling 10% stake. Coal India accounts for over 80% of domestic production and has a cash balance of about R60,000 crore.