November 09, 2012 / 14:48 IST
The government has appointed leading law firm ALMT Legal, Advocates & Solicitors as legal adviser for selling its 10 per cent stake in the country's largest iron ore miner NMDC. "The Department of Disinvestment, Ministry of Finance, Government of India has appointed ALMT Legal, Advocates & Solicitors as legal adviser to divest 10 per cent paid up equity capital of the company out of its shareholding of 90 per cent," the mining major said.
The legal firm operates through four offices - Mumbai, New Delhi, Bangalore and London. The stake sale will take place through "Offer for Sale by promoters through the stock exchanges" (OFS) method," NMDC said in a filing to the BSE. The government has already appointed Mumbai-based Citigroup Global Markets India, Goldman Sachs (India) Securities and DSP Merrill Lynch and Delhi-based Enam Securities and ICICI Securities as Merchant Bankers for the stake sale.The government had last month approved 10 per cent stake sale in NMDC that could fetch the exchequer over Rs 7,000 crore. The Cabinet Committee on Economic Affairs (CCEA) had on October 25 cleared sale of about 39 crore equity of NMDC of face value of Rs 1 each through the OFS route. At present, the government holds 90 per cent stake in the National Mineral Development Corporation (NMDC). As of March 31, 2012, the paid up equity capital of NMDC stood at Rs 396.47 crore.After disinvestment through the OFS (auction) method, the government holding in the Navratna entity will come down to 80 per cent. NMDC has reported a nearly 15 per cent decline in its net profit at Rs 1,678.62 crore for the quarter ended September 30, 2012, largely due to lower production and fall in sales. NMDC, under administrative control of Ministry of Steel, is primarily engaged in the business of iron ore mining. But it has also been expanding its activities into production of steel and other value added products. It is India's largest producer of iron ore, operating two mining complexes in Chhattisgarh and one in Karnataka.Although government had earlier proposed stake sale in it, it postponed the decision due to poor market conditions. The government plans to raise Rs 30,000 crore from disinvestment during the current financial year. However, it has not been able to come out with any public issue during the first six months of the fiscal. Due to uncertain market conditions, the government in the last fiscal could raise only Rs 14,000 crore from disinvestment against the target of Rs 40,000 crore. 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!
