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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

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