CCEA ratifies decision to sell 3.56% stake in NLC

The Cabinet on Tuesday ratified the decision to sell 3.56 percent stake in Tamil Nadu-based Neyveli Lignite Corporation (NLC) through an IPP, a deal worth Rs 360 crore.

While the 5.97 crore shares of the company were sold on August 2, the CCEA on Tuesday gave a post-facto approval for the disinvestment, an official source said.

The stake-sale was done to meet the minimum public holding norm of market regulator Sebi. Post divestment, the Centre's holding in the company has come down to 90 percent. While the CCEA had in June approved 5 percent stake-sale in NLC through an Offer For Sale (OFS), the empowered group of ministers (EGoM) on disinvestment later cleared selling only 3.56 percent in the company after taking into account the proposal of Tamil Nadu government.

Tamil Nadu Chief Minister J Jayalalithaa had written to Prime Minister Manmohan Singh in May, opposing disinvestment in the integrated mining-cum-power generating company. Later, she offered that the shares in the NLC disinvestment be alloted only to Tamil Nadu state PSUs.

The Centre sold over 5.97 crore shares, or 3.56 percent-stake, in NLC through an institutional placement programme (IPP) at a price band of Rs 58-60 a share. The issue was lapped up by five Tamil Nadu state PSUs within an hour of trade.