The DMK?s exit from the UPA government could pave the way for disinvestment in Neyveli Lignite Corporation (NLC) that has been stalled for nearly seven years.
?It is ultimately a political call and will largely depend on developments over the next few days. But a stake sale in the Neyveli Lignite Corporation is necessary to comply with Sebi?s minimum public float norms,? a senior official said. The coal miner is one of the handful of listed public sector firms that does not have a minimum public shareholding of 10 per cent. The Centre currently holds 93.5 per cent stake in the company.
Market regulator Sebi has set a deadline of August 2013 for all listed PSUs to have a minimum 10 per cent public float. The department of disinvestment is working with a number of state-owned firms, such as MMTC, to help them meet the deadline.
The government had begun the process of divesting 5 per cent stake in the Tamil Nadu-based miner through an offer-for-sale last year by inviting applications for merchant bankers for the issue. But it was abandoned after opposition from workers? unions of Neyveli Lignite Corporation as well as the DMK.
The former southern ally of the UPA has been against further stake sales in the firm since 2006.
A similar attempt by the government to disinvest stake in NLC in 2010 was also shelved.
Additionally, disinvestment in Neyveli Lignite Corporation would also help the government meet its target of Rs 40,000 crore from stake sales in 2013-14. Back of the envelope calculations reveal that a 5 per cent disinvestment in the mining firm would raise over Rs 500 crore.
For 2013-14, the department of disinvestment is in the midst of identifying PSUs for stake sales and has initiated consultations with the administrative ministries.
NECESSARY COMPLIANCE
* The miner is among a handful of listed public firms that does not have a minimum public shareholding of 10%
* The DMK and Neyveli Lignite Corporation unions have been opposing disinvestment of the company
Govt to sell 5.82% in SAIL on Friday
The government has decided to sell 5.82 per cent stake in state-owned steel maker SAIL through an offer-for-sale or auction on Friday.
The decision was taken at a meeting of the Empowered Group of Ministers (EGoM) on Wednesday.
The quantum of shares being disinvested, however, is half of the 10.82 per cent stake sale that was approved by the Cabinet last year.