CIL board meet this week may discuss overseas buyout plans

NEW DELHI: The board of Coal India may fast-track decision on overseas acquisitions in its meeting this week, in the wake of the Finance Ministry giving approval to go ahead with buyout of unlisted firms.

"Coal India (CIL) Board is scheduled to meet on December 14. It will take up the issue of acquisition of assets overseas in the light of relaxation in norms for such buyouts," a top CIL official told PTI.

The PSU has put together a war-chest of Rs 6,000 crore for acquisition of mines.

The Finance Ministry last month gave permission to the company to go ahead with its plans of acquisition of unlisted companies, he said.

On CIL's request for relaxation in PSU guidelines stipulating a minimum 12 per cent internal rate of return (IRR) on investments, the Finance Ministry said the company can proceed with such proposals if they pertain to strategic nature, but will be cleared by them, the official added.

The world's largest coal miner has zeroed in on two unlisted overseas coal assets, including one in Australia, for acquisition. It had sought clarifications from the Finance Ministry before entering into serious dialogues with them. It had received proposals offering IRR between 9 per cent and 12 per cent.

In this regard, CIL had approached the Finance Ministry in May this year for relaxation of PSU guidelines stipulating a minimum 12 per cent IRR on investments. It had also sought to sidestep the rule that only the mines of listed companies should be acquired.

CIL accounts for about 81 per cent of the domestic coal production.