NLC disinvestment: PM asks Jaya to send officer for talks

Prime Minister Manmohan Singh today asked Tamil Nadu Chief Minister J Jayalalithaa to depute before August 8 a senior officer to discuss the state government's proposal for purchasing five per cent stake in Neyveli Lignite Corporation (NLC).

Responding to a letter written by Jayalalithaa on July 7, Singh said her suggestion that Tamil Nadu state PSUs purchase five per cent out of government of India's shareholding in NLC has been discussed with SEBI. SEBI has informed that the possibility exists for a State Industrial Development Corporation to participate in an Institutional Placement Programme, "possibly with some preference", the Prime Minister's letter said.

"In order to give a final shape to the modalities of such an arrangement, I would request you to nominate a senior officer from the government of Tamil Nadu to coordinate with Department of Disinvestment and SEBI so that we can comply with the relevant rules before August 8," Singh wrote to Jayalalithaa. The sale of five per cent stake in NLC is expected to yield between Rs 400 crore to Rs 500 crore.

Among the issues to be decided is the pricing of the shares which are to be allotted to the various undertakings. Specified state public sector undertakings can acquire the stake provided they are declared qualified institutional buyers. The Prime Minister sought to dispel apprehensions in Tamil Nadu that five per cent disinvestment in NLC would lead to its privatisation. The fear is "unfounded and devoid of facts", he wrote to Jayalalithaa.