Coal India to win trust of displaced via IPO
Tuesday, 22 December 2009
NEW DELHI, Dec 21 (Economic Times): The country's largest coal miner, Coal India (CIL), is exploring the option of forming a trust to distribute a portion of shares offered in its proposed initial public offering to people from whom land is acquired for mining.
The option is being considered to institute a fair and transparent system for distribution of CIL's shares as compensation to people who lose their land or livelihood on account of mining projects planned by the company, an official involved in the disinvestment process told the reporter.
With the changes, the size of CIL's proposed initial public offer may increase to 15 per cent of its total equity capital. The coal ministry had earlier proposed to sell 10 per cent of government equity in the market under the proposed IPO.
An additional 5 per cent equity would be offered to CIL's 0.4.25 million employees as stock option and to the proposed trust in a ratio to be finalised later. The government holds 100 per cent stake in the company.
The proposal is still being finalised by CIL and the coal ministry. The company is also examining the legality of the exercise and has sought the opinion of market regulator SEBI.
"Once all clearances are received, a formal proposal would be sent to the department of disinvestment," an official connected with the proposed disinvestment process told newsmen.
The option is being considered to institute a fair and transparent system for distribution of CIL's shares as compensation to people who lose their land or livelihood on account of mining projects planned by the company, an official involved in the disinvestment process told the reporter.
With the changes, the size of CIL's proposed initial public offer may increase to 15 per cent of its total equity capital. The coal ministry had earlier proposed to sell 10 per cent of government equity in the market under the proposed IPO.
An additional 5 per cent equity would be offered to CIL's 0.4.25 million employees as stock option and to the proposed trust in a ratio to be finalised later. The government holds 100 per cent stake in the company.
The proposal is still being finalised by CIL and the coal ministry. The company is also examining the legality of the exercise and has sought the opinion of market regulator SEBI.
"Once all clearances are received, a formal proposal would be sent to the department of disinvestment," an official connected with the proposed disinvestment process told newsmen.