Coal India board may discuss buyback or special dividend

The Coal India board is likely to meet around December 16-17 to discuss a buyback or special dividend, as an alternative option to meet the government's revenue targets, reports CNBC-TV18's Anshu Sharma.

The management of the company is keen to avert the three day strike beginning December 17, which was announced by Coal India unions. This strike would impact coal production.

Also Read: CIL trade union may withdraw/defer planned strike: Sources

Sources suggest the Coal India management may reach out to trade unions next week and apprise them about the shelved divestment plan.

The government was considering divesting five percent of its stake in the company, but the idea has been shelved for the time being. This was decided after a meeting between the Prime Minister Manmohan Singh and finance minister P Chidambaram last week, following which the alternative options are being considered.

Coal India executives are of the view that the government should have opted for a buyback or special dividend in the first place, considering the tepid stock market conditions.

Earlier this year, CIL trade unions had issued notice to strike work in September in protest against the divestment and restructuring of Coal India.

Coal India paid Rs 7,953 crore as final dividend to the government for FY13 and the company is sitting on a cash pile of about Rs 60,000 crore.