Govt agrees with unions to cut Coal India stake sale

NEW DELHI Tue Jul 30, 2013 6:26pm IST

Locals collect coal from the dump site of an open coal field at Dhanbad district in Jharkhand September 19, 2012. REUTERS/Ahmad Masood/Files

Locals collect coal from the dump site of an open coal field at Dhanbad district in Jharkhand September 19, 2012.

Credit: Reuters/Ahmad Masood/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - The government has halved the size of the stake it plans to sell in Coal India (COAL.NS) to 5 percent after reaching a deal with the main trade unions.

The government was set to invite bids from bankers and advisers in May for a planned stake sale of 10 percent, but put the process on hold after the trade unions threatened to go on an indefinite strike if the sale went ahead.

That would have come as a blow to the energy hungry nation, which relies on coal to fuel almost 60 percent of its power generation. Coal India produces almost 80 percent of India's coal.

The trade unions, which represent the company's nearly 375,000 workers, had claimed they had been promised the government would not dilute its holding below the current 90 percent stake.

India sold a 10 percent stake in the world's largest coal miner in 2010, raising $3.4 billion in an initial public offer.

It planned to raise 200 billion rupees through a share auction of a further 10 percent stake in the current fiscal year to achieve its target of raising 400 billion rupees through stake sales to narrow its fiscal deficit.

"On the advice of trade unions, the government has decided that instead of 10 percent, we will disinvest 5 percent," Coal minister Sriprakash Jaiswal said on Tuesday.

"For the remaining 5 percent, the government will come out with a different mechanism. Major trade unions are ready for this," Jaiswal told reporters.

On Tuesday, shares in Coal India, valued by the market at $29 billion, closed 0.5 percent higher in a Mumbai market .BSESN that fell 1.25 percent.

(Reporting by Malini Menon; Writing by Prashant Mehra; Editing by Louise Heavens)

FILED UNDER:

"India's Daughter"

Reuters Showcase

Microfinance

Microfinance

Funding the unfunded: India helps small business borrow to grow  Full Article 

Insurance Sector

Insurance Sector

UK healthcare firm Bupa sees strong growth in India  Full Article 

Sensex Rises

Sensex Rises

Sensex edges up; consumer and healthcare stocks rise  Full Article 

Market Eye

Market Eye

FTSE adds nine Indian firms as large-caps in Asia-Pacific ex-Japan index   Full Article 

Indian Ocean Diplomacy

Indian Ocean Diplomacy

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

ECB Bond-Buying

ECB Bond-Buying

ECB raises growth forecasts, to start printing money next week  Full Article 

China Economy

China Economy

China signals "new normal" with lower annual growth target  Full Article 

Pharma Sector

Pharma Sector

Panel recommends waiving late-stage trials for some drugs  Full Article 

E-commerce

E-commerce

China backs e-commerce expansion in win for Alibaba, JD.com  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage