Fin Min sends Coal India divestment note to PMO
The government and Coal India have concluded the second round of overseas road shows held in Hong Kong, Singapore and Australia.
November 27, 2013 / 20:38 IST
At the beginning of this financial year, the government set a disinvestment target of Rs 40,000 crore and now with just three months left, the target seems to be a stretch.
News reports suggest that the Finance Ministry has sent a draft note for the Cabinet Committee of Economic Affairs (CCEA) note on Coal India disinvestment to the Prime Minister’s Office for its consideration.Meanwhile, the government and Coal India have concluded the second round of overseas road shows held in Hong Kong, Singapore and Australia.Also read: CIL tweaks provision of model fuel supply pacts on disputes Sources in the government have told CNBC-TV18’s Anshu Sharma that while investors are positive on the upcoming five percent stake sale in Coal India, they have some concerns on the recovery of outstanding payments of around Rs 10,000 crore. Of this, state owned utility NTPC alone owes about Rs 3,000 crore to Coal India. The government assured the investors that outstanding dues will be recovered and pointed out that Coal India has started supplying coal only on the basis of cash and carry from October this year.Among other concerns, investors are worried over the dwindling sales realisation with each passing quarter, accompanied by an increase in the wage bill and input costs like diesel. Investors are also worried about whether the company would be able to increase coal prices given the impending general elections as well as the situation of the debt laden state electricity boards across the country. There are also some concerns on how the company plans to utilise its cash pile of Rs 60,000 crore.The government on its part has assured the investors that the Board will have supremacy on coal pricing. Some investors have sought clarifications if there will be buyback or special dividend in near future. Coal Ministry sources said they are opposed to buyback and may consider a special dividend instead. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
