State-owned Coal India Ltd is mobilising a Rs 1,600 crore funding for two of its ailing firms - BCCL and ECL - to take them out of the Board for Industrial & Financial Reconstruction’s purview in the next two years.
Both the subsidiaries of the coal giant were referred to BIFR about a decade back and are struggling to come out of it.
“CIL is making efforts to take them out of BIFR and is hopeful of securing a medium-term loan of about Rs 1,600 crore for the companies, including Rs 1,000 crore for Bharat Coking Coal Ltd (BCCL),” Chairman Partha S Bhattacharyya told PTI.
Both the coal firms were loss-making and eventually were referred to the BIFR. But continued efforts by CIL has turned Eastern Coalfields Ltd (ECL) and BCCL into profit making entities recently, Bhattacharyya said.
“We are hopeful that both BCCL and ECL would come out of BIFR’s purview in two years and are making efforts in that direction. Apart from securing funding, write-offs are to be done. Besides, there are many legal and other issues to be resolved,” he said.
The pre-budget economic survey in July had mooted for listing of the two sick subsidiaries of the coal major by divesting 49 per cent government stake in the companies and transferring management control to a private firm.
The suggestion to revive the two firms comes at a time when the government is considering divesting up to 10 per cent of its stake in CIL, paving way for its early listing in the bourses.
ECL, which operates 110 mines mostly in West Bengal and Jharkhand, has an estimated reserve of 40 billion tonnes. It aims to produce 31 million tonnes of coal in this fiscal - up three mllion tonnes from the last fiscal.
Jharkhand-based BCCL with 78 mines has an annual production capacity of about 20 million tonnes and aims to increase its output manifold.
BCCL was referred to the BIFR for the first time in 1994-95 when the company reported a negative net worth of Rs 171 crore and its accumulated losses stood at Rs 1,293 crore.