Nevyeli share sale under cloud, unions threaten strike
Neyveli Lignite's share sale plans may hit rough weather with the state-run company today saying that its recognised and registered unions have threatened to go on indefinite strike against the decision.
New Delhi: Neyveli Lignite's share sale plans may hit rough weather with the state-run company today saying that its recognised and registered unions have threatened to go on indefinite strike against the decision.
The development follows barely a week after the government gave nod to five per cent stake sale in Neyveli Lignite (NLC).
"The company has received an intimation letter from the recognised unions and few other registered unions communicating their intention to go on indefinite strike till the disinvestment proposal of NLC shares is withdrawn by Government of India," the state-run company said in a filing to BSE.
The Tamil-Nadu headquartered firm is facing stiff protests over the disinvestment decision and 17 trade unions representing its 17,000 employees have already announced they would go on indefinite strike from the midnight of July three till the decision of disinvestment is withdrawn.
The Cabinet on June 21 cleared government's 5 percent stake sale in NLC, which would help garner around Rs 466 crore for the exchequer.
Department of Disinvestment (DoD) had moved Cabinet seeking to sell over 7.8 crore shares, or 5 percent, through an offer for sale (OFS) route in the miner.
The CCEA had earlier this month deferred a decision of stake sale in NLC.
Tamil Nadu Chief Minister J Jayalalithaa a couple of days back urged the Centre to reconsider the decision to disinvest shares in NLC. Various political parties in the state have also protested against the decision.
Jayalalithaa had last month written to Prime Minister Manmohan Singh, opposing disinvestment in the integrated mining-cum-power generating company.
She had said divestment in the company would lead to labour unrest and disruption of power supply from Neyveli.
The disinvestment department had communicated to the CCEA that there is no other option than to divest the stake in the company as it is the only way to make the company compliant with the minimum public shareholding norm.
SEBI has set a deadline of August 2013 for all listed central public sector units to have a minimum 10 percent public shareholding.
Jayalalithaa had suggested delisting of Neyveli Lignite or amending the Securities Contracts (Regulation) Rules, 1957, to make a special exemption for the company from the minimum public shareholding rule.
NLC generates about 2400 MW of power out of which Tamil Nadu alone receives 1140 MW. It also supplies electricity to Andhra Pradesh, Karnataka, Kerala and Union Territory of Puducherry.
Shares of the company closed at Rs 55.20 apiece on BSE, up 0.73 percent from the previous close.