Five public sector units including Steel Authority of India Ltd (SAIL), Coal India Ltd (CIL), National Thermal Power Corporation (NTPC), National Mineral Development Corporation (NMDC) and Rashtriya Ispat Nigam Ltd (RINL) have floated a special purpose vehicle (SPV), Coal Ventures International (CVI), to bid for equity participation in coal companies across the globe.
The SPV will be promoted by the public sector units where SAIL, and Coal India will chip in Rs 1,000 crore each, while RINL, NTPC and NMDC will contribute Rs 500 crore each, chairman and managing director of RINL, PK Bishnoi, said.
With an equity base of Rs 3,500 crore, the new company can leverage on this and raise another Rs 6,500-7,000 crore from lenders. This capital will put the SPV in a strong position for acquisitions anywhere in the world.
CVI is now looking for investment banking firms to guide it for possible acquisitions. “We would invite expressions of interest from investment banking firms and would finalise on it shortly,” Bishnoi said.
The chief executive officers of the five PSUs will be on the new entity’s board while the SAIL chairman will initially chair CVI as well. It would be on a rotational basis where the head of each PSU would chair the company for a period of one year, he added.
When asked about the equity the SPV would have in coal mines abroad, Bishnoi said, “We would have a minimum of 11% in the coal mines. In countries like Zimbabwe, Mozambique, Indonesia, and Russia, we would go through prospecting licence route while in Australia, Brazil and Canada, the company would have equity in running coal mines.”
The SPV will enjoy powers more than a navratna company and can invest Rs 1,500 crore abroad with Cabinet clearance.
There will be no bar if some more public sector units want to participate in the SPV, he said.
