June 04, 2013 / 22:45 IST
The Cabinet on Tuesday deferred a decision on proposal to divest 5 percent stake in Neyveli Lignite Corp to raise up to Rs 6,000 crore. The finance ministry had moved a proposal for sale of over 7.8 crore shares, or 5 per cent shares, through an offer for sale in the Tamil Nadu based miner.
"There is a letter from the CM of Tamil Nadu addressed to the Prime Minister and I think, the PM may consider first replying to that letter," finance minister P Chidambaram said. He was briefing media after a meeting of the Cabinet Committee on Economic Affairs (CCEA). The government is looking to raise between Rs 5,000 crore and Rs 6,000 crore from the stake sale.Shares of Neyveli Lignite closed at Rs 62.95, down 0.71 percent on the BSE. The disinvestment department had communicated to the CCEA
that there is no other option but to divest the stake in the company, as it is the only way to make the company compliant with the minimum public shareholding norm. The government currently holds 93.56 per cent stake Neyveli Lignite. SEBI has set a deadline of August 2013 for all listed central public sector units to have a minimum 10 percent public shareholding. Tamil Nadu Chief Minister 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. 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.
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