The Indian Cabinet is likely to take up on Friday the proposal to sell government's 7.8 crore shares or five percent stake in Neyveli Lignite Corporation Ltd. through an offer for sale (OFS) route. At the current market price, the sale will fetch around Rs.450 crore to the exchequer, reports said.
The Cabinet Committee on Economic Affairs (CCEA) earlier this month deferred a decision on the stake sale. The Department of Disinvestment (DoD) has again moved the proposal for sale.
Cabinet would consider "disinvestment of five percent paid up equity in Neyveli Lignite Corporation (NLC) out of Government's shareholding of 93.56 percent through OFS by promoters through stock exchange mechanism," said the draft CCEA note floated by DoD.
Last month, Tamil Nadu Chief Minister Jayalalithaa wrote to the Prime Minister Manmohan Singh, opposing disinvestment in the integrated mining-cum-power generating company. She said the divestment would lead to labour unrest and disruption of power supply from Neyveli.
The disinvestment department had communicated to the CCEA that there was no other option but to divest the stake in the company, as it was the only way for the company to comply with SEBI's minimum public shareholding norms.
SEBI has set a deadline of August 2013 for all listed central public sector units to have a minimum ten percent public shareholding.
Jayalalithaa had suggested de-listing of Neyveli Lignite or amending the Securities Contracts (Regulation) Rules, 1957, to make a special exemption for the company from the minimum public shareholding rule.
At the BSE, Neyveli Lignite shares are currently trading at Rs.57.75, down 3.35 percent from the previous close.
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