Seeking to venture into Australia, Indonesia and United States to scout for mineral resources, Coal India Limited (CIL) Board has approved the proposal to acquire stakes in unlisted firms overseas for valid offers.
The CIL Board, which met here on Wednesday, gave its approval to the issue in wake of the Finance Ministry having granted approval last month to CIL to go-ahead with a buyout of overseas firms that are unlisted. The Board, while granting approval, said CIL could evaluate the offers if only they are valid.
In the first phase of the programme, the company will take up three offers -- in Australia, Indonesia and the US. The PSU has put together a war-chest of Rs. 6,000 crore for acquisition of mines, a senior official said.
ADVERTISEMENT
On CIL's request for a relaxation in the PSU guidelines stipulating a minimum 12 per cent internal rate of return (IRR) on investments, the Finance Ministry had opined that the company could proceed with such proposals if they are of strategic nature, but these will have to be cleared by the government.
CIL had also sought to side step the rule that only the mines of listed companies should be acquired, which was permitted by the Finance Ministry. The world's largest coal miner has zeroed in on three unlisted overseas coal assets for acquisition. It had sought clarifications from the Finance Ministry before entering into serious dialogues with owners, having received proposals offering an IRR between 9 per cent and 12 per cent.