Despite strike notice, govt likely to go ahead with CIL disinvestment

Aug 21 2013, 01:53 IST
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SummaryThe department of disinvestment has already begun the process of selecting merchant bankers.

Despite a three-day strike notice by workers at Coal India Ltd, the government is banking on the coal ministry to reach an agreement with the trade unions and go ahead with the proposed disinvestment in the state-owned miner.

“As of now, the disinvestment is very much on track. We are hoping that the coal ministry will be able to resolve the matter with the unions,” said a senior government official, pointing out that the government has already tried to reach a compromise by reducing the stake sale quantum to 5 per cent from the earlier 10 per cent. Further, it would also be allotting shares to CIL workers on a 5 per cent discount on the discovered price, he said.

“The stake sale is very essential as it would raise over Rs 8,000 crore, which is much needed money at present,” the official said, adding that a 5 per cent strike would not dilute the company’s public sector character.

Finance minister P Chidambaram is also understood to have raised the issue of a timely disinvestment in CIL at a stock taking meeting with key finance ministry official on Monday.

The department of disinvestment has already begun the process of selecting merchant bankers for the planned five per cent stake sale in the coal miner that will be carried out through the auction route.

But opposed to the stake sale, all five major trade unions that represent CIL workers have given a notice for a three day strike from September 23.

A senior leader with one of the trade unions at CIL however said that the ministry has not approached them for fresh talks. “At present, we are going ahead with the strike as planned. No date has been communicated to us for further talks,” he said. The Centre currently holds 90 per cent stake in CIL following a 10 per cent disinvestment in 2010 that raised Rs 15,000 crore.

On Tuesday, CIL shares gained 2.08 per cent on the Bombay Stock Exchange to close at Rs 262.50 apiece.

The government has pegged disinvestment proceeds at Rs 40,000 crore this fiscal but has raised just about Rs 1,000 crore from stake sales in public sector firms including MMTC, Hindustan Copper.

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