EGoM to decide price band for Neyveli stake sale on Wednesday
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EGoM to decide price band for Neyveli stake sale on Wednesday

Last Updated: Tuesday, July 30, 2013, 21:40
 
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EGoM to decide price band for Neyveli stake sale on Wednesday
New Delhi: An Empowered Group of Ministers may on Wednesday decide the price band for offloading 3.56 percent stake in Neyveli Lignite Corporation.

"Meeting of Empowered Group of Ministers (EGoM) to decide the price band for disinvestment of Neyveli Lignite Corporation (NLC) is likely tomorrow," a Coal Ministry source said.

A panel of ministers, headed by Finance Minister P Chidambaram, had earlier cleared disinvestment of 3.56 percent stake in Neyveli Lignite through institutional placement programme (IPP) and the issue is likely in the first week of August.

The Department of Disinvestment (DoD) had originally planned to divest 5 percent of its stake in the Tamil Nadu-based mining company, which was approved by the Cabinet last month.

Since the IPP mode is allowed only to meet the public holding norm of minimum 10 percent, the department would now sell only 3.56 percent or over 5.58 crore shares.

"The EGoM has approved 3.56 percent disinvestment in Neyveli Lignite though IPP," Disinvestment Secretary Ravi Mathur had told reporters after a meeting of EGoM.

The DoD has written to Sebi seeking preference for Tamil Nadu state PSUs, he had said, adding that the Department would now file the offer document with Sebi and after that the issue would hit the market.

Sources, however, had said that the issue is likely only in the first week of August.

Government holds 93.56 percent stake in Neyveli Lignite Corp (NLC).

Market regulator Sebi had earlier this month given its consent to Tamil Nadu government's proposal to buy Centre's entire stake on offer in NLC, provided the acquisition is done by a qualified state entity through the IPP route.

The Tamil Nadu government has said it has 5 state PSUs which can be qualified as QIBs. The DoD has also sought exemption from Sebi so that preference is given to these PSUs only.

Tamil Nadu Chief Minister J Jayalalithaa had written to Prime Minister Manmohan Singh last month saying the state would buy the 5 percent of Centre's equity that is being divested. The letter was sent to Sebi for their comments.

Senior officials from department of disinvestment (DoD), Coal Ministry and Principal Secretary (Finance) of Tamil Nadu state government had earlier discussed the modalities for offloading stake in NLC.

The stake sale is being proposed to meet the minimum public holding norms. SEBI has set a deadline of August 8, 2013, for all listed central public sector units to have a minimum 10 percent public shareholding.

The Cabinet had last month cleared sale of 5 percent of government's stake, through an offer for sale in NLC.

PTI



First Published: Tuesday, July 30, 2013, 21:40


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