The Cabinet Committee on Economic Affairs (CCEA), on Friday, approved disinvestment of 5 per cent of the Centre’s equity stake in Neyveli Lignite Corporation (NLC) through the OFS (Offer For Sale) route in accordance with Securities and Exchange Board of India (SEBI) regulations.
The Department of Disinvestment (DoD) had moved the CCEA seeking to offload over 7.8 crore shares, or 5 per cent of the Centre’s holding in the Tamil Nadu-based integrated mining-cum-power generating company through OFS.
At current market prices, the stake sale in NLC is expected to fetch about Rs.466 crore to the exchequer and also enable compliance of SEBI’s norm stipulating 10 per cent minimum public holding in public sector undertakings (PSUs).
According to an official statement here, NLC’s authorised capital stands at Rs.2,000 crore.
Of this, the issued and subscribed equity capital as at the end of March 2012 is Rs.1,677.71 crore comprising 167.771 crore equity shares of the face value of Rs.10 each. After the disinvestment, the Centre’s holding in the company will down to 88.56 per cent.
It may be recalled that, earlier this month, the CCEA had deferred a decision on the stake sale of NLC as the Tamil Nadu Chief Minister J. Jayalalithaa had conveyed to Prime Minister Manmohan Singh her government’s opposition to the divestment in view of the likely labour unrest and consequent disruption in power supply from Neyveli.
The DoD, however, informed the CCEA that there was no option to disinvestment as that was the only route open for making Neyveli Lignite compliant with SEBI’s minimum public shareholding norm.
The market regulator has set August this year as the deadline for all listed PSUs to adhere to the minimum public shareholding stipulation.