Modalities for offloading five per cent stake in NLC discussed

The Union Finance Ministry will seek exemption from market regulator Securities and Exchange Board of India (Sebi) for giving preference to Tamil Nadu State PSUs while allotting shares during disinvestment of Neyveli Lignite Corporation.

Senior officials from the Department of Disinvestment (DoD), Coal Ministry and Principal Secretary (Finance) of Tamil Nadu government on Wednesday discussed the modalities for offloading Centre’s five per cent stake in the NLC.

“We will write to Sebi seeking exemptions so that only Tamil Nadu PSUs are given preference in picking up stake in NLC in the proposed institutional placement. The State government has said it has 4 or 5 PSUs which can be qualified as QIBs,” sources said.

Market regulator Sebi had last week given its consent to the Tamil Nadu government’s proposal to buy Centre’s 5 per cent stake in NLC provided the acquisition is done by a qualified State entity through the Institutional Placement Programme (IPP) route.

“The DoD and Coal Ministry will discuss those exemptions with Sebi next week and file offer document after that,” the source said.

The Empowered Group of Ministers (EGoM) on disinvestment, headed by Finance Minister P Chidambaram, will decide whether there would be a minimum floor price or a price band for the IPP.

Tamil Nadu Chief Minister Jayalalithaa had written to Prime Minister Manmohan Singh last month, saying that the State would buy the 5 per cent of Centre’s equity that is being divested.

The letter was sent to Sebi for their comments.

The DoD had originally planned to sell 5 per cent stake in NLC through the offer for sale route, but the move was opposed by the Tamil Nadu government.

The Centre currently holds 93.56 per cent stake in NLC.

The stake sale is being proposed to meet the minimum public holding norm. SEBI has set a deadline of August 8 for all listed Central public sector units to have a minimum 10 per cent public shareholding.

The Cabinet last month cleared sale of 7.8 crore shares, or 5 per cent of government’s stake, through an offer for sale in NLC to raise Rs 459 crore at current prices.

Shares of NLC closed at Rs 58.80 on the BSE on Wednesday.

The TN headquartered firm is facing stiff protests over the disinvestment decision, with 30,000 workers going on indefinite strike since July 3 to protest the disinvestment.

One more meet

Special Correspondent writes from Chennai:

According to an official, one more meeting would be held shortly, as the Wednesday’s meeting, which lasted one hour, remained inconclusive. The date for the next meeting would be intimated later.